IMPACT OF EFFICIENT DEBT MANAGEMENT ON THE PROFITABILITY OF COMMERCIAL BANKS (A STUDY OF SELECTED BANKS IN ABA, ABIA STATE)
Abstract
ABSTRACT
This study investigates the impact of efficient debt management on the profitability of commercial banks, focusing on selected banks in Aba, Abia State. Debt management remains a critical factor in the banking sector, as improper handling of loans and advances often leads to non-performing assets, reduced liquidity, and ultimately declining profitability.
The research adopts a descriptive survey design, utilizing both primary and secondary data. Structured questionnaires were distributed to bank staff across selected branches in Aba, while financial reports were reviewed to complement findings. Statistical tools such as correlation and regression analysis were employed to evaluate the relationship between debt management practices and profitability indicators.
Findings reveal that effective debt management significantly enhances bank profitability through improved loan recovery, reduced default rates, and better risk assessment mechanisms. The study concludes that banks with strong debt monitoring systems experience higher financial stability and performance.
Recommendations include strengthening credit policies, adopting advanced risk assessment technologies, and continuous staff training to enhance debt recovery efficiency.
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