Assessment of Non-Performing Loans on Deposit Money Banks’ Performance During the Digitalized Banking Policy in Nigeria

This research examines the impact of non-performing loans (NPLs) on the performance of Deposit Money Banks (DMBs) in Nigeria in the context of digitalised banking policy.The Central Bank of Nigeria (CBN) has furnished data and financial accounts of eight chosen banks, focusing on the extensive implementation of digital banking policies.The Panel Autoregressive Distributed Lag (ARDL) model examines the association between NPLs and DMBs performance in Nigeria.The return on equity methodology is utilised to evaluate the performance of DMBs.The findings indicate that NPLs have not substantially impacted the performance of the selected banks, even when considering recent data encompassing the post-implementation period of the digitalisation strategy.The coefficient of regression for the results, which is -1.234659, suggests a negative association between NPLs and the performance of DMBs, as shown by the return on equity (ROE).This study contributes to the existing body of information by reaffirming that NPLs exhibit an inverse relationship with banks' return on equity (RTE).Policymakers and financial organisations must acknowledge the intricate dynamics present within the Nigerian banking system.The study suggests that maintaining digitalisation efforts can help mitigate the adverse effects of NPLs on DMBs.