Risk Management Strategy and Financial Stability of Nigerian Deposit Money Banks

This study evaluates the relationship between risk management strategy and the financial stability of deposit money banks in Nigeria. The banking sector remains central to Nigeria's economic architecture, and systemic financial stability depends significantly on the quality of individual bank risk management frameworks. The research employs a documentary and survey design, analyzing risk governance disclosures and financial stability indicators from ten deposit money banks listed on the Nigerian Exchange Group. Data covering fiscal years 2020 to 2024 were extracted from bank annual reports and Central Bank of Nigeria financial stability reports. Key informant interviews were conducted with chief risk officers. Analysis combined financial ratio analysis and qualitative content evaluation. Findings indicate that banks with integrated enterprise risk management frameworks demonstrate significantly higher capital adequacy ratios and lower non-performing loan ratios compared to those with fragmented risk functions. The study finds that operational risk management, particularly cybersecurity risk and fraud prevention strategy, has become the most rapidly evolving component of Nigerian bank risk frameworks following increased digital transaction volumes. The research concludes that Nigerian deposit money banks must develop adaptive risk management strategies that continuously integrate emerging risk categories alongside traditional credit and market risks. Keywords: risk management strategy, financial stability, deposit money banks, Nigeria, enterprise risk management.