Risk Management and Performance of Listed Banks in Ghana
The objective of the study was in two parts; first, to construct an overall risk index to ascertain risk level of banks listed on Ghana Stock Exchange (GSE), second, to ascertain whether there is a significant relationship between risk management and bank performance. Secondary data of all listed banks on GSE over the period 2007-2014 was used and a panel regression data approach and a risk index were constructed for all listed banks. Findings show that, banks listed on Ghana Stock Exchange have high risk indexes on average indicating that banks were safer by employing prudent risk management practices. Evidence further suggests that indigenous Ghanaian listed banks has lower risk index relative to foreign listed banks. We also find evidence that risk management is positively related to performance of GSE listed banks when the latter is measured from ROE perspective.
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