Effect of Operational and Strategic Risk Disclosures on Market Value of Listed Deposit Money Banks in Nigeria

Abstract

This study examines the effect of corporate risk disclosures on the market value of listed commercial banks in Nigeria between 2015 and 2024. The research specifically investigates the influence of operational and strategic risk disclosures, as well as firm-specific factors including firm size, leverage, and return on assets (ROA), on market valuation. The study employs an ex post facto research design and utilizes panel regression analysis to analyze secondary data extracted from annual reports of listed banks. The empirical findings reveal that strategic risk disclosures has a significant positive effect on market value in contrast, Operational risk] disclosures have positive statistically significant in effect on market value. The study concludes that both operational and strategic risk disclosures are valuable tools for enhancing the market value of Nigerian Deposit Money Banks. Based on these conclusions, the study recommends that the study recommends that Banks should strengthen the quality and frequency of strategic risk disclosures in their financial reports. Emphasizing forward-looking information, competitive positioning, and long-term business risks can positively influence investor perception and market value. Although operational risks were not statistically significant in this study, improving the clarity and relevance of these disclosures could eventually enhance their value to investors, especially in light of emerging cyber and compliance risks.