AN ANALYSIS OF NON-PERFORMING LOANS IN NIGERIAN DEPOSIT MONEY BANKS

ABSTRACT The causes of Non-Performing Loan (NPL) in both developed and emerging nations depend on the peculiarities that classify such nations and have a multidimensional aspect. This study examined non[1]Performing Loans in Nigerian Deposit Money Banks (from 1999-2019). Panel data were obtained from annual reports of listed DMB and analyzed. The panel data technique adopted the random effect model through the Hausman test. Findings showed that the Loan-to-Total Assets Ratio (LTAR) has a significantly positive relationship with NPLs of banks and the Capital Adequacy Ratio (CAR) has an insignificant relationship with NPLs of banks. The study presented recommendations that Loan to total assets ratio should be reduced, Banks are advised not to be carried away by high lending interest rates, they should be cautious and also, the Central Bank of Nigeria (CBN) should encourage bank managers to invest more on less risky investments with fixed interest income such as government bonds; this will enable the bank to minimize the level of the bank risky assets and losses that may arise from NPL