Kasum, Abubakar SadiqFagbemi, Temitope O.Zakariyah, M. L.2021-03-022021-03-022018http://hdl.handle.net/123456789/4440Investment diversification is an important process in risk management. It enable investors to considerably reduce their risk without compromising their return. One of the reasons that investment diversification is very important is because some commercial banks activities are also carried out by other institutions like discount houses and other non-bank financial. As a result of such harsh competition the profit margin of these financial institutions have reduced. This will leave the banks with no option than to seek alternatives if they must continue to survive. In view of this, the study examines the option investment diversification as an alternative to the very dynamically competitive environment that banks now find themselves. The study employed secondary data obtained from the financial statement of Nigerian banks. Panel least square regression technique was employed in the study. The results of the regression analysis revealed that investment diversification will improve the management of Nigerian banking industry. Conclusively, Losses in one sector or location can be compensated from the gain(s) obtained from other sector or location and therefore reduces the risk involve in investing in a very risky asset.enInvestment DiversificationPerformanceBanking industryArticle