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The investigation focuses on risk management and credit administration at GT Bank Plc's Murtala Mohammed Square branch in Kaduna. The following research led this study: How is risk managed at GT Bank Plc's Murtala Mohammed Square branch in Kaduna?

What are the obstacles to risk management and credit administration at GTBank Plc's Murtala Mohammed Square branch in Kaduna? What are the remedies to the challenges identified? As the research design, a survey was used.

The sample size was 30 people drawn from the credit department of GT Bank Plc's Murtala Mohammed Square branch in Kaduna. The data gathering tool was a five-likert-scale questionnaire design. Data was analysed using the mean (x).

The findings show that risk is primarily managed in Gt Bank Plc, Murtala Mohammed Square branch, Kaduna, by embarking on insuring customer deposits with NDIC, as well as proper evaluation and monitoring of policy, and efficient of proposed on investment that would be financed with bank loan.

However, the issues confronting risk management and credit administration are fundamentally flawed loan evaluation techniques, as well as a lack of expertise and skills in credit administration and risk management.

Commercial banks should build strong and professional credit risk management departments and hire highly motivated employees; credit officers are at the forefront of credit administration.

As a result, issues concerning their selection, training, placement, job evaluation, reward, and punishment must be addressed efficiently.


1.1 Background Of The Study

Risk management is the process of identifying, assessing, and prioritising hazards. It is the effect of uncertainty on objectives, whether good or negative, followed by coordinated and cost-effective resource application to monitor and limit the possibility and/or impact of unfortunate events or to maximise the realisation of possibilities (Okeh, 2006).

Every commercial bank's survival is dependent on its ability to efficiently manage its risks and loan or advance portfolio.

However, in recent years, commercial banks in Nigeria have seen expanding non-performing credit portfolios, which have considerably contributed to the banking sector's financial hardship.

Financial institutions must manage the credit risk inherent in the portfolio as well as the risk in individual credits or transactions. This is because financial institutions' survival and capacity to compete are dependent on their ability to profit and manage credit risk.

This is why lending is dependent on two essential banking products: money and information. Banks receive these products from their clients by providing them with valued services.

They bundle money and information about their borrowers with attractive banking services to build loan agreements, which they then market to their consumers (Hempel and Simonson, 2007).

As a result, the risk evaluation system of a financial institution includes both objective and subjective components. Financial statements and the application of specific financial ratios that show liquidity, leverage, and earnings are used to determine the objective aspects.

Despite the requirement that risk be quantifiable, risk assessment systems always include a subjective component that aims to capture intangibles such as the quality of management, the borrower's industry standing, and the quality of financial reporting. Inconsistencies may occur from these subjective items.

Many financial institutions have had issues in this area over the years as a result of their failure to effectively manage credit risk.

As a result, the leading source of serious banking difficulties remains directly tied to tax credit standards for borrowers and counterparties, poor portfolio risk management, or a lack of attention, which leads to a deterioration in a bank's counterparties' credit standards.

As a result, investigating the topic matter of this inquiry becomes critical.

1.2 Statement of the Problem

Commercial banks' non-performing credit portfolios have recently increased as a result of their management's inability to adequately manage risk and credit administration.

This problem resulted in substantial bad debts in commercial banks, and the monetary authorities labelled a number of other commercial institutions as distressed banks.

As a result, there is a need to investigate the subject: An examination of risk management and credit administration at Union Bank Plc's Kaduna Main branch is warranted.

1.3 Research Questions

The following research questions were developed to guide this investigation in order to actualize the aims of this research:

1) What are the risk management methods used by GT Bank Plc?

2) What is the credit administration process at GT Bank Plc?

3) What are the restrictions of GT Bank Plc's Risk Management and Credit Administration?

1.4 Objectives Of The Study

The study's main goal is to evaluate the influence of risk management on the profitability of GT Bank Plc's Murtala Mohammed Square Branch in Kaduna. The precise goals are as follows:

1. Determine the risk management technique employed by GT Bank Plc.

2. To understand how credit is managed at GT Bank Plc.

3. To identify the restrictions impeding risk management and credit administration at GT Bank Plc.

1.5 Hypothesis Statement

1. H0: Effective credit risk management is not a strong predictor of bank profitability.

H1:Effective credit risk management is a key predictor of bank profitability.

2. H0 Bank hardship is not caused by poor credit risk management.

Poor credit risk management results in bank distress.

3. H0 risk management has little effect on bank profitability performance.

In terms of profitability, H01 risk management improves bank performance.

1.4 of the Research

This study will benefit financial institutions, particularly GT Bank Plc, because the findings will serve as a foundation for policy creation addressing risk management and credit administration in banks. This research will help shareholders, stakeholders, and the broader society.

1.6 Scope of The Study

To that aim, the research will look into the best way to manage risk at GT Bank Plc's Murtala Mohammed Square branch in Kaduna. During the course of the study, the branch manager, other employees, and consumers will be interviewed.

1.7 Definition of Terms

1. Credit Risk: This refers to debtors' delinquency and default, or failing to make payments on time.

2. Pure risk: This refers to a decrease in business value caused by damage to business property caused by theft, robbery, fire, flood, or the potential of an employee dying prematurely due to a work-related sickness or accident.

3. Price Risk: This relates to cash flow unpredictability caused by changes in input and product prices.

4. Credit Administration: This is the mechanism utilised to manage a financial institution's exposure to loan delinquency and default.

5. Business Risk: This refers to cash flow variability.

6. Loan Appraisal: This is the process of calculating the numerous lending parameters and the overall loan limit for each borrower based on his debt capacity and loan duration in advance.

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