NON-PERFORMING LOANS AND PROFITABILITY OF PRIMARY MORTGAGE BANKS IN NIGERIA 2012-2023
Keywords:
Non-Performing loans and profitability of primary mortgage banks in Nigeria.Abstract
This study examined the effect of non-performing loans (NPL) on the profitability of primary
mortgage banks in Nigeria from 2012 to 2023. Utilizing time series data from the Nigeria
Deposit Insurance Corporation's annual report for 2023, the research investigated how
variables such as NPL, capital adequacy ratio (CAR), and loan-to-deposit ratio (LDR)
influence return on assets (ROA). Auto-regressive distributed lag models (ARDL) were
applied for the analysis, revealing that while non-performing loans had a negative effect,
this effect was statistically insignificant over the study period. The study suggests that
primary mortgage banks should focus on enhancing credit risk management, optimizing
loan recovery strategies, diversifying their loan portfolios, improving capital adequacy,
ensuring regulatory compliance, and investing in technology and data analytics to
strengthen their operational and financial resilience.