Risk Management and Performance of Listed Banks in Ghana

  • Eric Dei Ofosu-Hene University of Ghana
  • Peter Amoh FinRisk Solutions, Ghana
Keywords: Capital adequacy, Risk management, Ghana Stock Exchange, Bank Performance, Risk Index

Abstract

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.

Author Biography

Eric Dei Ofosu-Hene, University of Ghana
I Lecture and Research in Finance, Actuarial Science and Risk Management  at the University of Ghana Business School. I also coordinate the MSc Financial Risk Management Sadwich programme.

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Published
2016-12-30
Section
Articles