Asymmetric Evaluation of Banking Stability and Bank Performance in Nigeria: An NARDL Approach (Published)
The study examines asymmetric evaluation of banking stability and bank performance in Nigeria. The study employs a longitudinal research design and utilizes secondary data covering the period from 1985-2018. The data was sourced from the CBN statistical bulletin. We consider the Non-Linear auto-regressive Lag Model (NARDL) to model the relationship between bank stability and bank performance in Nigeria. On the overall, the results suggest that in the short run bank stability/regulation variables, LIQR, LDR, CRR tend to exhibit significant asymmetric effects on bank performance, however, this effects tends to be quite weak as we move into the long run. The long run effects indicate that positive and negative shocks to stability variables do not appear to be significant in their effects on bank performance which this is quite insensitive to the nature of financial stability shocks. The study recommends that there is still need for banks to improve their stability ratios at levels that can adequately ensure that economic and financial shocks can be absorbed while still maintaining their day to day operations. The need for proper fiscal and monetary coordination is also important especially if monetary authorities expect to use stability indicators for effective instruments of monetary policy
Analysis of Non Performing Loans (NPL) and Net Interest Margin (NIM) on the Bank’s performance based on the Classification of Business Activities (BUKU) Registered with the Financial Services Authority (OJK) Period 2016 to 2018 (Published)
The Banking Sector is a very important one for the economic activities of a country that functions as a stabilizer and also supports the economic activity of the real sector by channeling funds to the real sector in the form of working capital loans from sources of funds collected by banks from communities that have excess funds. Therefore bank management must be careful in managing finances so that banks can be said to be healthy and the economic sector will grow. Sources of bank income are from loans disbursed in the form of Net Interest Margin (NIM) which is profit in the banking sector, with a high Net Interest Margin, banks will be healthier, but in lending not all loans are disbursed into the current category, there are some who experience to a loss so that company profits will decline due to bad loans called Non Performing Loans (NPL), so that it affects the bank’s performance in terms of its fundamentals, Return on Assets (ROA). Therefore management must pay attention to both of the above. Based on the results of the study found that from banks that are classified based on Bank Core Capital (BUKU) then in BUKU 1 it occurs that NIM has no effect on ROA, this is because banks in BUKU 1 banks with core capital below 1 trillion IDR, then lending to generally to small and medium entrepreneurs and individuals so that it does not take large profits, but NPL has a negative effect on ROA this means that management pays more attention to NPL levels compared to NIMs, because if the NPL increases it will worsen bank performance. On the other hand, NPL BUKU 4 does not affect ROA because banks in BUKU 4 are large banks with capital of more than IDR 30 trillion. They are very free to distribute credit and are generally given to corporations and large companies for investment capital and working capital so that NPL in the short term is not too disturbing bank performance because it already has a high NIM.
The concept of variance of thinking and the need to achieve organization objective through uniformity of behavior by employees necessitate the need for staff training and staff development. Policies, procedures and rules alone cannot in isolation enable organization to achieve its objective as organization commitment to shaping human behavior and altitude play a vital role. Performance at highest level cannot be achieved without skilled, knowledgeable and being technology compliance. This paper attempted to breach the gap by establishing the effect of staff training and development on organization performance. A sample of 384 employees of Nigerian Banks was selected using a mean. The hypothesis was tested using Z-Score result of -0.0586, 0.0302, 0.0903, -0.0552, 0000, -0.0498, 0.0312, -0.00370. And by looking at the normal distribution value, the probability of obtaining such Z-value is extremely small. Therefore we rejected the null hypothesis that staff training and development does not influence Bank performance. And for better understanding by lay people, we also computed T-score. In order to determine the reliability of attitude of the respondent, co-efficient of variation was also computed. The result of the study is statistically significant as the p. value for z-score is less than 5%. We suggested that in order to trigger off staff exceptional performance, the idea of contract staff should be jettisoned because despite receiving training, they still see themselves as being discriminated against by the organization and always ready to quit at slightest opportunity. Also organization programme of activities, should emphasize staff retraining and orientation training for new employees
The study critically assessed the extent to which financial sector liberalization has affected bank performance in Nigeria. Panel data model was employed for data spanning a period of thirty four years (i.e. 1971-2011). Earnings per share (EPS), Returns on capital employed (ROCE) and Returns on equity (ROE) were used as proxies for bank performance (i.e the dependent variables) while interest rate, real financial savings and exchange rates were used as the proxies for financial sector liberalization (i.e. the independent variables). A number of diagnostic tests were also conducted on the residuals to evaluate the models; these include the Breuch-Godfrey serial correlation Lagrange Multiplier (LM) test, the Ramsey REST test of specification error (i.e. to test for omitted variables, incorrect functional form, correlation between exogenous variables and error term) and the Cumulative Sum (CUSUM ) tests of parametric stability, the LM test of serial correlation showed that there was an absence of first order serial correlation in the residuals and cumulative sum tests also showed that observations are more stable during Pre-SAP period than the post-SAP era. The result obtained showed that though the effect of financial sector liberalization on bank performance in Nigeria for the period of study has been significant, especially as measured by the proxies of Earnings per Share and Return on Equity, it has not been significant enough to transform the nations’ economy to the desired level. Hence, the study suggests among other things that a precondition for the efficiency of a liberalized financial sector is a stable macroeconomic environment and it is essential to ensure that government fiscal policy is assigned to complement monetary policies not to work against monetary and fiscal policies and help restore domestic and international confidence in the Nigeria banking system.
This study examined the impact of bank lending rate on the performance of Nigerian Deposit Money Banks between 2000 and 2010. It specifically determined the effects of lending rate and monetary policy rate on the performance of Nigerian Deposit Money Banks and analyzed how bank lending rate policy affects the performance of Nigerian deposit money banks. The study utilized secondary data econometrics in a regression, where time-series and quantitative design were combined and estimated. The result confirmed that the lending rate and monetary policy rate has significant and positive effects on the performance of Nigerian deposit money banks. The implication of these is that lending rate and monetary policy rate are true parameter of measuring bank performance. We therefore recommend that government should adopt policies that will help Nigerian deposit money banks to improve on their performance and there is need to strengthen bank lending rate policy through effective and efficient regulation and supervisory framework.