THE IMPACT OF MACROECONOMIC VARIABLES ON THE PROFITABILITY OF LISTED COMMERCIAL BANKS IN NIGERIA

Abstract

Due to the immense contribution of commercial banks to the economic development in Nigeria, this research investigate the impact of macroeconomic variables on profitability of banks in Nigeria from 1990-2013. Pooled Ordinary least method is used to determine the effect of three major factors; gross domestic product (GDP), interest rate (INTR) and inflation (INFR) on return on equity (ROE) which proxies’ profitability. The findings from the empirical point of view show a positive relationship of gross domestic product (GDP) with return on equity (ROE). Interest rate and inflation rate have a negative relationship with return on equity (ROE). Gross domestic product have a significant positive effect on Return on equity(ROE) while interest rate have a significant negative effect on return on equity(ROE) but inflation is not significant at all levels of significance.

Keywords: Commercial Banks in Nigeria, Macroeconomic Variable, Profitability


Article Review Status: Published

Pages: 85-95 (Download PDF)

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