IJSRPAOP 182|p. Effect of Operational Risk on the Financial Performance of Listed Deposit Money Banks in Nigeria

This study investigates the effect of operational risk on the performance of listed deposit money banks in Nigeria. The research adopts ex post facto research design. The target population comprised of the 13 deposit money banks listed on the Nigeria Exchange Limited (NGX) between 2006 - 2021. Secondary data was utilized. The study measures operational risk using the cost-income ratio (CIR), operating cost ratio (OPR), and net interest margin to operating cost ratio (NOR). The study measured financial performance using return on equity (ROE) while the panel data analysis technique and GMM method were used to analyse the data with the aid of STATA Version 15. The result of the study revealed that NOR exerted significant negative effect on the financial performance of listed deposit money banks in Nigeria. The study recommended that management should institutionalize employees regular training and retraining on operational risk awareness to proactively mitigate operational risks