Author(s)

Augustine Chukwujekwu Odubuasi¹, Nkechi Theresa Ofor², Felix Ubaka Ilechukwu²

¹Department of Accounting, Hezekiah University, Imo State, Nigeria.
²Department of Accounting, Chukwuemeka Odumegwu Ojukwu University, Anambra State, Nigera.

This study did a comparative analysis on the effect of enterprise risk management (ERM), risk committee, on earning capacity of African banks. The study covered a study period of ten (10) years spanning from 2009 to 2018. The study covered Nigeria, Ghana, and South Africa. Data for the study were gotten from the fiscal reports of the banks under investigation. The study was analyzed using the panel data methodology. The study found that both ERM and risk committee efficiency have the greatest effect on the earning capacity of Nigerian firms (R² = 60%) than the rest two countries. More so, our model has shown that South Africa has performed on a closer chase to Nigeria, in generating returns to the shareholders using the regressors mentioned above (R² = 56%). Finally, Ghana has performed the least so to say as the same variables generated or made the least input to ROE (R² = 24%). Hence, we conclude ERM and risk committee are instrumental to improved earnings capacity of selected African banks. As such, the study recommends that regulators in African countries should enforce strict compliance and ensure that the ERM policies are implemented across banks in Africa. Lastly, corporate board should engage men that are knowledgeable in risk management.

Enterprise Risk Management, Risk Committee, Earning Capacity, African Banks, Comparative Approach

Odubuasi, A. , Ofor, N. and Ilechukwu, F. (2022) Enterprise Risk Management, Risk Committee, and Earning Capacity of African Banks: A Comparative Approach. Modern Economy, 13, 51-68. doi: 10.4236/me.2022.131004.