Risk Management Strategies as Determinants of Sustainability in Deposit Money Banks Within Ibadan, Oyo State, Nigeria

Abstract

This study examined Risk Management Strategies as Determinants of Sustainability in Deposit Money Banks within Ibadan, Oyo State, Nigeria. The main aim was to investigate how credit risk management and liquidity risk management influence the long-term sustainability of banks in the region. Specifically, the study sought to assess the effect of credit risk management on sustainability and examine the relationship between liquidity risk management and sustainability. The research adopted a descriptive survey design, targeting branch managers, risk officers, and accountants from ten selected deposit money banks. A total of 120 questionnaires were distributed, and 110 valid responses were analyzed using regression and correlation analyses with the aid of SPSS version 26. Findings revealed a significant positive effect of credit risk management on bank sustainability (β = 0.642, t = 6.215, p < 0.001), while liquidity risk management exhibited a moderate positive relationship with sustainability (r = 0.518, p < 0.01). The combined model showed that both variables jointly explained 54% (R² = 0.54) of the variance in sustainability, indicating that sound risk management frameworks enhance institutional resilience and operational efficiency. The study concluded that effective credit appraisal systems, prudent liquidity control, and strong governance structures are essential for the sustainability of deposit money banks. It recommended that banks strengthen their risk management systems, maintain adequate liquidity buffers, and comply with regulatory standards to ensure long-term stability and competitiveness.