Strategic Risk Behaviour and Shareholders’ Wealth of Deposit Money Banks in Lagos State, Nigeria
Bank shareholders are experiencing diminution in their investment as banks continue to pose more non-performing loans, low profitability, decline in return on equity and reduction in dividend. Banks are engaging in risky businesses to meet the shareholders’ expectations. This study was carried out to examine the relationship between the strategic risk behavior (SRB) and shareholders’ wealth (SHW) of deposit money banks (DMBs) in Lagos State, Nigeria. This was significant for stability of the financial system. This study adopted survey research design, purposive technique of non-probability sampling. Primary data was collected using a questionnaire. Descriptive statistics and Pearson Product Moment Correlation ® were used to test the hypothesis. The study found that there was a weak but negative relationship between SRB and SHW of DMBs (r (82) = -.297, p<0.05). The study recommended that setting of targets on SHW should be informed by moderate risk and reasonableness.
Keywords - Deposit Money Banks, Risk Disposition, Shareholders’ Wealth, Strategic Risk Behaviour, Targets.