Integrity Research Journals

Model: Open Access/Peer Reviewed
DOI: 10.31248/AJFA
Start Year: 2022

Investigating leverage as a determinant of risk disclosure by deposit money banks in Nigeria   |   Article Number: 5BE8825C2   |   Vol.1 (1) - October 2022

Received Date: 21 April 2022   |   Accepted Date: 19 July 2022  |   Published Date: 30 October 2022

Authors:  Mabur Zumbung Danladi , Musa Samuel Jerry* and Maram Isa Maren

Keywords: disclosure, risk., banks, leverage, loans

The purpose of the paper is to investigate the relationship between leverage and risk disclosure in Nigeria. Considering the 14 deposit money banks listed on the stock exchange, a partial least square-structural equation model was run to examine the influence of leverage on the extent of risk disclosure measured through an index based on the information disclosed in their annual reports. Findings revealed that leverage has a significant relationship with the risk disclosure of deposit money banks in Nigeria. The likely cause for this decision could be the fact that those who would like to give out loans or any facility to a bank would want to see the debt profile of such a bank, that is whether they have been doing well in the past or not. The implication of the finding on the banking sector is that leverage is not independent of risk disclosure of deposit money banks in Nigeria. It is finally recommended that banks should disclose their information, most especially the risk related type to stand the higher chances of enjoying any facility that may come their way.

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