ABSTRACT

Banking business is mainly business of iritermediaUon. Banks act as

intermediaries while carrying out the financial i;isaction arising at

improving the financial business of the economy. Ei\/ery bank official like

any other proprietor of business enterprises work i)dcfatigabiy to achieve

the cardinal objectives of the business which are profit maxirnizatioris, high

level of liquidity and ssiainable increase in the vfta of the owners net

worth.

Banks mobilize money from individual arid corporate bodies in forrTl of

deposits (savings, current and time deposits). These are the liability side

of bank balance sheet. To balance the other side of he balance sheet in

the banking service banks grant credit to the deficit scctor of the economy

in form of overdraft, Advances, short-term medium long-term loans to

sustain the financial improvement and developiient ol the economy.

Since business and all human endeavours are lull of risks banking

business is not an exception. Certain risks such credit risk, liquidity

risk, foreign exchange rate risk, iterest rate ri;k affect the cred1

disbursement of the bank. Risk is the possibility that the actual

performance of human activities will not correspod with the anticipated

result, It is the deviation of actual from proposed ac1iviies.

The study is an analysis of lire risk in the baiks credit portfolio

management in live selecd banks in Abia State. !' random sample of 20

banks officials froni each bank riiaking a total of 100 fficers was chosen

from the area, data were collected using structured questionnaire. Date

analysis was done using simple statistkal tools such as mean, frequency,

distribution table, and percentage. The study shows that credit risk is the

risk that affect bank credit portfolio most. The level of the risk exposure is

so high that it gives rise to intense financial loss. hut most banks now

apply the Risk avoidance arid minimization. Risk transfer and Risk

retention approaches to control the adverse situation. To curb the

abnormalities, credit control arid proper credit administration and adequate

review of loan disbursement have to be applied to.educe the credit risk

occurrences.