Research on Operational Risk Management in First Bank of Nigeria (FBN Bank)

The FBN bank is the oldest and largest of the twenty-four banks operating in the Nigerian economy. The objective of this study is to assess the impact of Operational Risk Management on FBN Banks. Past literatures were reviewed and theoretical frameworks such as the extreme-value theory and risk theory of profit were adopted to support the study. The research adopted both qualitative and quantitative techniques, and the data for the study was employed from primary and secondary sources. Primary data questionnaires were distributed to 60 bank workers, but Only 50 surveys were returned from the served respondents, and the analysis was focused on those 50. Eventually, the respondents' responses were analyzed using simple percentages. Moreover, the secondary data were derived from the sampling deposit money institutions audited and publicly available financial statements of first bank of Nigeria. Following, the results were analyzed based on time series basis from 1999 to 2020 using regression estimates. The investigation indicated that operational risk and credit risk have a greater impact on FBN banking operations than market risk. Fraud and forgeries also have a negative impact on banking operations. However, fraud and forgery risk, operational risk, credit risk, and system risk abound in FBN banking operations, all of which must be managed effectively to improve bank performance and stability. Deductively from the survey analyses, the FBN banks' risk management procedures have effectively minimized the different risks that FBN banks face. Nevertheless， a case study was carried out and these necessitates the design of a risk indicator system that will further help first bank of Nigeria to map and curb their operational risks.

The regression result revealed that operational risk management had a considerable impact on FBN banks' performance measures in Nigeria. Especially the Ratio of Non-Performing Loans to Total Loans (BRNPL), and Ratio of Cost to Income (BROCI) has a negative significant impact on the financial stability of FBN banks in Nigeria as measured by Return on Equity (ROE).