The study examined the effect of loan risk Control techniques on loans portfolio quality of Nigerian commercial banks, using selected deposit money banks in Nigeria as case study. The study was motivated by the increasing rate of loan default, poor loan administration, and the need for effective loan Control practices in the Nigerian banking industry. Specifically, the study sought to examine the impact of loan risk Control on bank profitability, evaluate the influence of loan practice on bank profitability, and determine the influence of loan practice and loan risk Control on loans and advances of banks in Nigeria. The study adopted an ex-post facto research design and made use of quantitative secondary data obtained from the annual reports and accounts of selected banks, namely First Bank of Nigeria Plc, Zenith Bank Plc, and Access Bank Plc. The population of the study comprised the twenty-three (23) operating commercial banks in Nigeria, while simple random sampling technique was used to select the three banks used for the study. Data relating to profitability, bad debts, loan facilities, leverage, and equity capital were extracted from the annual financial statements of the selected banks. The data collected were analyzed using descriptive statistics and the Ordinary Least Square (OLS) regression technique under the Best Linear Unbiased Estimator (BLUE) framework. Findings from the study revealed that loan risk Control significantly influences bank profitability. The study also showed that loan practice policy significantly affects profitability of banks in Nigeria. Furthermore, the coefficient of determination indicated that a substantial proportion of variations in bank profitability were explained by loan risk Control variables. The findings equally revealed that poor loan risk Control contributes to loan default, weak liquidity position, and reduction in banks’ lending capacity. Based on the findings, the study concluded that effective loan risk Control techniques and sound loan policies are essential for improving the loans portfolio quality and profitability of commercial banks in Nigeria. The study therefore recommended that banks should establish effective loan administration procedures, strengthen loan monitoring mechanisms, improve client appraisal techniques, and ensure strict compliance with lending policies. The study also recommended stronger regulatory supervision by the Central Bank of Nigeria and the establishment of an effective loan bureau system to reduce incidences of loan default and multiple borrowing.

Keywords: credit risk management, loan portfolio quality, commercial banks, loan default, Nigeria.