RISK-ASSETS QUALITY AND FINANCIAL PERFORMANCE OF QUOTED DEPOSIT MONEY BANK IN NIGERIA

This study empirically explores the effect of risk asset quality through the non-performing loans on the financial performance of quoted deposit money banks. Data on different type of asset quality and financial performance from 2000-2020 were collected from website of the quoted deposit money banks, central bank of Nigeria reports and Nigeria stock exchange. Ordinary least square regression analysis, descriptive statistics, autoregressive distribution lag, co-integration, granger casualty, unit root test and error correction model were used in analyzing the data with the aid of E-view version 12. The study observed that non-performing loan shows a negative and significant influence on the return on asset of sampled deposit money banks in Nigeria.The study concludes byreaffirming the importance of maintaining high-quality assets for deposit money banks as poor asset quality, as indicated by a high level of NPLs, can erode the bank's profitability, and by extension, its ROE.The study recommends that the regulators and supervisory authorities need to closely monitor and address NPLs in the banking sector. High NPLs can not only affect individual bank stability but also have systemic implications for the overall health of the financial system. Regulatory frameworks that encourage prudent lending practices and the maintenance of healthy asset quality are crucial