Abstract:
The purpose of the study was to examine the impact of financial risk management on bank
profitability of four listed banks at DSC using panel data analysis for a period of thirteen years (2010—
2022). The data used was extracted from secondary data in the annual financial reports of the banks
within the period of study. The data was analysed using Stata version 15. The coefficients of the
Ordinary Least Squares (OLS) regression model were generated. The analysis discovered that
bank size, a control variable, had a negative impact on bank profitability and was statistically
significant at the 1% level, whereas capital adequacy had a positive impact on bank profitability at
the 5% significance level, credit ratio had a negative relationship with profitability but was statistically
insignificant, and liquidity ratio had a positive effects but was statistically insignificant. The study
concludes that capital adequacy ratio and firm bank size are vital in influencing bank profitability at
DSE, and managers should pay more attention to these variables so as to elevate bank profitability
in the long term. The study recommends that the management team strive for higher capital
adequacy, use economies of scale based on the bank's size to generate more profits through
efficient services, and ultimately maintain balanced liquidity to cater for the ability to cover financial
shocks in the bank's operations
