ttp://iaeme.com/Home/journal/IJM 165 editor@iaeme.com h International Journal Management (IJM) of Volume 12, Issue 3, March 2021, pp.165-174, Article ID: IJM_12_03_015 Available online ttp://iaeme.com/Home/issue/IJM?Volume=12&Issue=3 at h ISSN Print: 0976-6502 and ISSN Online: 0976-6510 DOI: 10.34218/IJM.12.3.2021.015 © IAEME Publication Indexed Scopus IMPACT OF CREDIT RISK ON BANK PERFORMANCE IN NIGERIA Ayodele, Olamide Emmanuel* Department of Banking and Finance, Ekiti State University, Nigeria Awoniyi-Famiwole Claudius Olaoye Department of Accounting, Bamidele Olumilua University, Ikere, Nigeria Babatunde Afolabi Department of Banking and Finance, Federal University Oye, Nigeria *Corresponding Author ABSTRACT The study considered the effect of credit risk on bank performance in Nigeria, taking into cognizance three banks selected at random in Nigeria. The study used return on assets as the dependent variable and also used capital adequacy ratio, non-performing loans ratio, total loans to total assets, total deposit and interest rate as independent variables coupled with the use of the classical Ordinary Least Square and panel co- integration techniques revealing that credit risk has negative impact on bank performance in the short run and while credit risk also has a long run relationship with bank performance in the long run. Hence, it was recommended that regulatory framework should be adhered to, internal control system should be enhanced while macroeconomic policy makers should stabilize the economy in a bid to stabilize profitability of banks. Key words: Credit Risk, Non-Performing Loans, Credit Administration Cite this Article: Ayodele, Olamide Emmanuel, Awoniyi-Famiwole Claudius Olaoye and Babatunde Afolabi, Impact of Credit Risk on Bank Performance in Nigeria, International Journal of Management (IJM), 12(3 2021, pp. 165-174. ), ttp://iaeme.com/Home/issue/IJM?Volume=12&Issue=3 h 1. INTRODUCTION Risk is a major condition that has its antecedence traceable to the origin of mankind. Risk is the possibility that the outcome of an action will deviate from the original plan. Hence, risk has been found to transverse every sector of human endeavors which does not exclude the financial system in every economy. More specifically, in the financial system, risk is a very important aspect in the intermediation process; this therefore necessitates the need for a sound risk management policy framework. In consonance with the above, Adesugba and Bambale (2016)