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Abstract
The aim of this study is necessitated by the frequent failures that Nigerians banks suffered hinging from week corporate governance to poor risk management issues. With the consolidation of Nigerian Banks in 2004 which shrank the number of money deposit banks in Nigeria from 89 to 24, it was generally believed that a major financial crisis had been averted. But barely 2 years later, it was quickly realized that there are appeared to be no relief in sight, as more than 40% of the 24 mega banks were soon to be classified as failings or failed banks. The paper employed ex-post as research design and utilizes a panel data report of the annual financial statement of the four sampled banks from 2014 to 2019. The study use financial ratios and regression analysis using SPSS as tool of analysis. The findings of this study reveals that though financial ratios are the most widely used predictors of bank failures globally, this study has established that regression analysis are also powerful predictors that can be relied upon. Apart from establishing a strong significant relationship between the explained and the explanatory variables (using CAMEL composite index). This is clearly shown in the very high coefficient of determination (R2) almost 100 percent and level of significance {p-value of 0.000} in all the 4 sampled banks. The paper concludes that incessant failures of banks in Nigeria has to do with the non-adherence of corporate governance codes as enshrined by the regulators as well as flagrant abuse of risk management principles are factors that results in banking distress and failures in Nigeria. The paper recommends that board diversity should be encourage by nominating female directors in order to create a gender balance for purpose of checks and balances, maximum punitive action should be taken against the board and management that ran any bank aground as well as enforcing strict Corporate Governance and Risk Management codes by the regulators.
Keywords: Corporate Governance, Risk management, Bank failures, Exogenous and Endogenous Variables, Non-Performing Loans.
1.0 Introduction
It is generally acknowledge that the financial sector of an economy is the engine of economic growth and development. The financial sector especially the banking sector plays the roles of engine of growth that propels...