Abstract
This study focuses on the effect of loan management on performance of Nigerian banks. Relevant data were collected from financial report. The data was obtained from a survey of some selected banks in Nigeria. The data collected were analyzed by the use of regression. Some performance indicators such as profit after tax, earnings per share and dividend were used to measure the performance of the selected banks.
The analyses reveal that loan is a predominate source of revenue, and effective management of loan portfolio and credit function is fundamental to banks safety and soundness. Although these activities continue to be mainstays of loan portfolio management, analysis of past credit problems, such as those associated with the banking sector, has made it clear that portfolio managers should do more.
There is also the failure of bank management to establish sound lending policies and adequate credit administration procedure. Banks, as custodians of depositors’ fund therefore, are obliged to exercise due care and prudence on their lending operations. While the test reveals that there is no significant relationship between effective loan management and the performance of banks.
The work concludes that loan management has not affected the performance of Nigerian banks. Finally the research recommend that effective management of loan portfolio and credit risk be strictly adhere to, and critical evaluation must be made and they should be continuously checked for proper management
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