Journal of Harbin Engineering University Vol 44 No. 11 ISSN: 1006-7043 November 2023 855 Evaluation of Financial Risk Disclosure and Financial Performance of Listed Financial Institutions in Nigeria Oluyinka Isaiah Oluwagbade Department of Accounting Afe Babalola University Ado-Ekiti, Ekiti State, Nigeria Email oluwagbadeoi@abuad.edu.ng ORCID 0000-0001-8453-4728 Muyiwa Emmanuel Dagunduro Department of Accounting Afe Babalola University Ado-Ekiti, Ekiti State, Nigeria Email dagundurome@pg.abuad.edu.ng ORCID 0000-0002-1177-7101 Niyi Solomon Awotomilusi Department of Accounting Afe Babalola University Ado-Ekiti, Ekiti State, Nigeria Email: awotomilusi@abuad.edu.ng ORCID 0000-0001-9561-4520 Samuel Ajibade Dada Department of Accounting Afe Babalola University Ado-Ekiti, Ekiti State, Nigeria Email dadasa@abuad.edu.ng ORCID: 0009-0007-2719-5708 *Corresponding Author: Muyiwa Emmanuel Dagunduro *Department of Accounting, Afe Babalola University Ado-Ekiti, Ekiti State, Nigeria. Email: dagundurome@pg.abuad.edu.ng, ORCID: 0000-0002-1177-7101 Abstract This study was prompted by the observed decline in the performance of listed financial institutions in Nigeria. Its primary objective was to assess how disclosing operational risks affects the financial performance of these institutions listed on the Nigerian Exchange Group (NGX). The research employed ex-post facto and panel data research designs, using data extracted from the audited financial statements of listed financial institutions over a ten-year period from 2012 to 2021. The study focused on a population of thirty-four listed financial institutions, including nineteen deposit money banks and fifteen insurance companies on the NGX. A purposive sampling technique was applied, investigating twenty of these firms due to the availability of complete data. The descriptive statistic and panel regression analysis were adopted. The overall results showed that financial risk disclosure had a statistically significant effect on the financial performance of listed financial institutions in Nigeria. It was concluded that financial institutions in Nigeria need to improve their financial performance through reasonable corporate risk disclosure. Financial institutions should consider prioritizing the disclosure of specific risk factors, particularly Currency Risk Disclosure and Capital Management Risk Disclosure, to improve their financial performance. Improved reporting practices in these areas may positively impact the Return on Equity, Return on Assets, and Tobin's Q of these institutions. Keywords: Risk Management, Financial Risk Disclosure, Financial Performance, Financial Institutions, Nigerian Exchange Group. JEL Classification Codes: G21, G22, G3 1. Introduction Over the years, Nigerian financial institutions have experienced a downturn in performance, attributed in part to the array of risks they regularly face (Kadipe et al., 2021). Efficient risk management stands as a crucial aspect for their survival due to the potential negative impact of these risks on their performance, such as diminishing expected profits from loans or investments (Almania, 2019). These institutions serve as key drivers in economic development by enabling the flow of funds, making their financial robustness essential for the nation's advancement. Corporate entities hold the responsibility to present comprehensive disclosures encompassing material information regarding their finances, operations, advantages, and risks (Ogbuga et al., 2022). This transparency ensures a clear and accurate view of their financial status, allowing informed investment decisions by investors. Such disclosure requirements stem from regulatory frameworks, particularly for public entities, ensuring proper transparency, given the public interest in their affairs and the significant role these institutions play in the nation's overall economic advancement (Rahayu et al., 2022). The Nigerian business environment's volatile nature exposes companies to financial risks that could potentially affect their performance. These risks span economic factors like exchange rates, inflation rates, and interest rates, as well as non-economic elements like natural disasters, governmental instability, and changing stakeholder expectations (Tapang et al., 2022). Risk constitutes an inherent part of company activities and decision-making, and the financial sector's ability to handle risk holds immense importance for economic development.