Effect of Financial Products on the Performance of Selected Deposit Money Banks in Nigeria: 2005-2019, (Published)
This research study investigated the effect of financial products on the performance of selected deposit money banks in Nigeria. The study sought to ascertain whether the various products introduced by the banks in the face of keen competition have significantly impacted on their performances. Secondary data were utilized and sourced from annual reports and Nigerian Stock Exchange fact books. Multiple regression was used as a tool of data analysis. The results from test of the three hypotheses revealed that, mobile banking has significant positive effect on return on assets (ROA), point of sale has positive significant effect on return on equity (ROE) while automated teller machine also have positive significant effect on earnings per share (EPS). The study therefore recommended that, there is need for deposit money banks to heavily invest in technology as this will highly encourage the adoption of financial products technologies and this will influence the performance of deposit money banks in Nigeria. Banks management should strive to innovate better and cheaper ways of serving customers. With shorter transaction turnaround time, transactions volumes can be significantly increased.
Fraudulent Practices in Nigerian Banks: Implications on the Performance of Deposit Money Banks, 1994 -2015 (Published)
This study investigates fraudulent practices in Nigeria banks and the implications on the performances of Deposit Money Banks in Nigeria. Secondary data were obtained from the annual reports of the Nigerian Deposit Insurance Cooperation (NDIC) covering 1994 to 2015 and analyzed using econometric techniques. Data obtained were tested for co-variance using Johansen Co-Integration and thereafter the four hypotheses postulated were tested using Ordinary Least Square Regression (OLS) and Vector Auto Regression Estimates. The study revealed significant negative relationships between fraud variables and bank performances represented by earnings before tax. The study therefore recommended that directors of Deposit Money Banks should invest in cyber controls and also conduct a thorough review of the existing internal control measures in the banks to ascertain the weaknesses of the existing controls and to strengthen them toward checking fraud. Further, the regulatory agencies such as the National Deposit Insurance Cooperation should rise above their present reactive posture of reporting fraud cases and proactively take up measures to monitor and safeguard depositors’ funds in the Deposit Money Banks. The study also suggested a strong synergy/collaboration between National Deposit Insurance Corporation and Central Bank of Nigeria for effective and proactive monitoring and regulation of the Deposit Money Banks to check fraudulent tendencies and by so doing forestall collapse of the banks. Furthermore, the study strongly recommended that all necessary prosecution measures as well as the evidence enactments should be amended and updated by the Federal Government to ensure that fraud investigation and prosecution are sped up for positive results and justice as deterrent to others.
Operational Risk Management and Financial Stability of Deposit Money Banks in Nigeria (Published)
The series of financial crisis that have been experienced in both the developed and developing countries showed the importance of having well-functioning financial systems as financial crises directly affect the health of a country’s economy. Many banks had collapsed or experienced serious financial constraints both in Nigeria and the rest of the world due to their continuous exposure to severe operational risk events and fraudulent actions and these have continued to be major threat to the banks. This study investigated the effect of operational risk management on financial stability of deposit money banks in NigeriaThe study employed ex-post facto research design. The population comprised twenty-two licensed deposit money banks in Nigeria as at September 30th, 2018. A total sample of eleven deposit money banks were selected using convenient sampling method and data covering 2009 to 2018 were sourced from the audited and published financial statements of these sampled deposit money banks. Certification of the financial statements by external auditors and regulators and the approval by the board of directors confirm the reliability of the data. Data were analysed using descriptive and inferential statistics.The results showed that operational risk management had negative significant relationship with financial stability of the selected banks in Nigeria (F(3,106)= 24.46, Adj. R2= 0.4091, p < 0.05). Specifically, Non-performing loan to total loan ratio, cost to income ratio and total loan and advances to total deposit ratio have significant relationship on the variables of financial stability of deposit money banks in Nigeria proxied by Capital Adequacy Ratio (F(3,106)= 18.23, Adj. R2= 0.316, p < 0.05), Return on Equity (F(3,106)= 22.52, Adj. R2= 0.389, p < 0.05) and Liquidity Ratio (F(3,106)= 22.45, Adj. R2= 0.389, p < 0.05)The study concluded that operational risk management influences the financial stability of selected deposit money banks in Nigeria. The study recommended, among others, that banks should improve their operational risk management practices and policies in order to maintain sound capital adequacy and sustainable financial stability.
In the history of development of the Nigerian banking industry, it is evident that most of the failures experienced within the industry prior to the consolidation era were as a result of financial dampening that finally led to bad loans and some other unethical factors and financial stability has generated the ever-increasing attention and interest in academic and banking sector in Nigeria. This study examined the effect of credit risk management on financial stability of deposit money banks in Nigeria; specifically assessing the relationship between credit risk management and financial stability and establishing the level of credit risk measures to be put in place to ensure financial stability of deposit money banks in Nigeria. The study adopted ex-post facto research design. The target population comprised of 22 deposit money banks in Nigeria licensed by the Central Bank of Nigeria as at November 30th, 2018 from which 10 deposit money banks were purposively selected. Data were sourced from the audited and published financial statements of the selected deposit money banks. The data were validated by the statutory auditors. Descriptive and inferential statistics (multiple regression) were used to analyze the result. The findings revealed that asset quality represented by non-performing loan to gross loan ratio (NLPR), Total risk Asset to total asset ratio (TRAR), Loan Loss Provision to total loan ratio (LLPR) and Total Loan to total deposit ratio (TLDR), all had a significant effect on the variables of Financial Stability which are; Debt-to-Shareholders Fund F (99)=11.17, Adj. R2= 0.2419, p < 0.10, Capital Adequacy Ratio F(99) = 20.77, Adj. R2= 0.0490, p < 0.10, Fixed Deposit Cover F(99) = 8.95, Adj. R2= 0.165, p < 0.10 and had joint insignificant effect on Liquidity Ratio F(99)=1.31, Adj. R2= 0.486, p> 0.10 of deposit money banks in Nigeria. The study concluded that credit risk management influenced financial stability of quoted deposit money banks in Nigeria. The study recommended that operators of banks, should pay more attention to those variables of credit risk management in order to improve financial stability by managing credit risk that deposit money banks are facing to improve financial stability and to put in place proper credit management policy to mitigate credit risk and to also improve the knowledge of credit management policy in financial institutions.
Previous studies have examined the effect of financial sector development on poverty reduction. This study is unique by adopting the UNDP broader measure of well-being, the Human Development Index (HDI) to provide an argument for financial sector development process and poverty reduction interrelationship in Nigeria for the period 1988-2017. Stationary properties of the series were tested by the ADF unit root test. The paper uses the Johansen Co-integration test to examine the existence of long run relationship among the variables. Generally, it was found that financial sector development has both positive and significant relationship with HDI used as proxy for poverty level. The result also indicates a significant positive relationship between aggregate credit (AGC) and HDI. This shows that financial sector development which manifests in the ability of the banking sector to facilitate borrowing and investment in income earning assets, and stimulate the private sector, in particular, small and medium scale enterprises (SMEs), impacts positively on HDI. Finding also shows that aggregate deposit (AGD) (deposit opportunities available to deposit money banks) is negatively related to HDI and significant. This perhaps suggests that the volume of deposit mobilization by deposit money banks in Nigeria is relatively low to what is needed to transform the economy as well as the standard of living of the people. Realising that Human development is a desideratum and sacrosanct in poverty reduction, the objectives of policies aimed at further strengthening the banking sector should be people focused.
Lateral Workplace Incivility and Organizational Health of Deposit Money Banks in Nigeria (Published)
This study examined the effects of lateral workplace incivility on organizational health of deposit money banks in Rivers State. The objective was to investigate the nature of relationship between lateral workplace incivility and organizational health. The independent variable was proxy by lateral workplace incivility while organizational health was proxy by goal focus, resource utilization and cohesiveness. The research design utilized was the quasi experimental research design. The population of the study comprises of 17 deposit money banks operating in Port Harcourt quoted in the Nigeria Stock Exchange. Three hundred and forty six respondents were obtained as sample size, using the Taro Yemen’s formula. Spearman rank correlation was used to test the ten postulated null hypotheses at 0.05 level of significance computed within SPSS software. The study found that there is a negative and no significant relationship between lateral workplace incivility and resource utilization and negative and no significant relationship between lateral workplace incivility and cohesiveness. The study further found that there is a negative and no significant relationship between lateral workplace incivility and goal focus. The findings of this study support the need to appraise organizational incivility, especially among high-status employees, as perceived across all hierarchical levels considering the significance relationships between structure and workplace incivility and organizational health. The study concluded that lateral workplace incivility is not significantly associated with the measures of organizational health of deposit money banks in Rivers State. We therefore recommend that organizations should reexamine their hiring and selection procedures, selection criteria should include checking personality characteristics that could add buffering effect in dealing with a stressor at workplace.
Impact of Customer Relationship Management (CRM) On the Performance of Deposit Money Banks (DMBS) In Abuja (Published)
This study examines the impact of Customer Relationship Management on the performance of Deposit Money Banks in Abuja. The study investigates how CRM variables such as customer attraction, customer satisfaction and customer retention impact on the performance of Deposit Money Banks. The study adopted a survey research method where data was collected using questionnaires administered to both employees and customers of the ten randomly selected DMBs in Abuja made up of the 341 Population of the study. Taro Yamane Sample Size formula was used to determine the sample size (184). Out of the 184 copies of questionnaires that were distributed, 175 representing 95.1 % response rate were retrieved and used for analysis. As part of the method of data analysis, Pearson Correlation and Ordinary Least Square (OLS) was used to test the formulated hypotheses in line with the objectives of the study. The major finding reveals that, “there is significant relationship between Customer Relationship Management and performance of Deposit Money Banks in Abuja”. It was recommended that Deposit Money Banks (DMBs) in Nigeria’s North-Central sub-region should improve on Customers’ attraction activities in order to achieve deeper market penetration which will help in attracting more customers to strengthen their competitive positions. The study concluded that DMB’s should adopt CRM since it contributes significantly to their performance.
Impact Of Monetary Policy on Stock Market Development: Implications for the Nigerian Economy (Published)
The unsustainable and decreasing contribution of the Nigeria stock market to economic growth and development is the rationale for this study. Previous studies were unable to fully address the core developmental problems of the stock market in terms of its contribution to economic growth. These studies focused on how the monetary authorities can stabilize the stock market and reduce its volatility but ignored issues bordering on the contribution of the stock market to economic growth, which of course is the essence of any stock market and as such characterize its development. Consequently, the objective of this study is to investigate the impact of monetary policy on the development of the stock market in Nigeria. The study period covered from 1981 to 2015. Cointegration and vector error correction modelling (VECM) were employed for the analysis. The cointegration test indicates that there exist long run equilibrium relationship among the variables of the model. VECM result indicated that monetary policy, through the growth rate of money supply has impacted positively and significantly on the development of the stock market in Nigeria. Also, findings further indicated that prime lending rate has had a negative impact on the development of the stock market in Nigeria. The study recommended among others, that the Central Bank of Nigeria (CBN) should use its growth rate of money supply to further boost the development of the stock market but must however be mindful of the channeling of the increase in money supply in order to curtail the possible negative impact of inflation.
Financial Reporting Quality and Its Effect on Investment Decisions by Nigerian Deposit Money Banks (Published)
The study investigated the effects of financial reporting quality on investment decision making by Deposit Money Banks in reference to Zenith Bank Plc, Nigeria. Data obtained from the audited annual reports of Zenith Bank Plc that covered period of 2009 – 2016.The study utilised both Descriptive and Ordinary Least Square Regression method with the aid of using E-view 9 to analyse the data. The findings showed that, there was a significant effect of variables of (Financial Reporting Quality FRQ measures as profit after tax, cash used in/ from investing and cash and cash equivalent) on investment. The result also shows that, Financial Reporting Quality has significantly influenced on investment of Deposit Money Banks with (R2 = 0.98; P <0.05). The study concluded that, higher financial reporting quality increases investment decision by Deposit Money Banks in Nigeria.
The paper uses panel data spanning from 2011 to 2015 to examine the differential earnings quality of Deposit Money Banks (DMBs) and insurance companies listed on the Nigerian Stock. We employ two proxies of earnings quality as dependent variables in running logistic regression and Generalised least square (GLS), all based on random effects, to test the hypothesis that DMBs are likely to exhibit higher earnings quality than insurance companies. We fail to document evidence to support our hypothesis. We recommend for research employing richer data set with more proxies of earnings quality.
Effectiveness of Audit Committee Practices and the Value of Listed Deposit Money Banks in Nigeria (Published)
This research study examines the effectiveness of audit committee and as well explores the relationship between audit committee effectiveness and the value of deposit money banks in Nigeria. The followings were identified as audit committee characteristics (Internal control, the integrity of financial reporting, commitment of audit committee members and meeting) and were used in identifying the effectiveness of audit committee. Eight questions-survey questionnaires related to the four identified characteristics were administered to 55 respondents spread amongst the five sampled banks. The questionnaire enables the study to seek the perceptions of the respondents on the effectiveness of audit committee in deposit money banks in Nigeria. The Chi Square statistical tool was used to test the two study’s hypotheses. The study finds that the Characteristics of Audit Committee practices relates to the effectiveness of Audit committees’ of the deposits money banks in Nigeria, hence portraying the committee’s effectiveness in performing its functions, the effectiveness of audit committee does not necessarily improve or otherwise on the value of the deposits money banks and results also indicate that activities as relate meeting of the audit committees’ of deposit money banks are not clearly stated in the annual accounts of the banks. It therefore recommends that detail issues of meetings of audit committees be clearly stated and or included in the annual reports of the banks.
This study examines the effects of working capital management on the profitability of Deposit Money Banks (DMBs) quoted on the Nigerian Stock Exchange for single period of year 2013. The paper adopts Returns on Equity (ROE) and Returns on Assets (ROA) as dependent variables for profitability while Current ratio (CRR), Profit before taxation to current liabilities (PCL), Operating cash flow to current liabilities (OCL) and Cash balance to total liabilities (CTL) are proxies for working capital and as well independent variables. The annual account and report of all the eleven banks quoted on the Nigerian Stock exchange as at 2013 served as the sources of data, regression was used to determine the relationship between the dependent and the independent variables, and the study finds that significant and positive relationship exist between the working capital management and the profitability of the DMBs in Nigeria. The findings indicate that the two profitability proxies are positively affected by all the elements of working capital management. The paper noted variety of components of working capital and profitability; this therefore means that banks are to ensure that appropriate management of working capital is essential for achieving its objective of maximizing the profitability.
THE EFFECT OF MERGER ON DEPOSIT MONEY BANKS PERFORMANCE IN THE NIGERIAN BANKING INDUSTRY (Published)
The study objective gives an insight into the effectiveness of economic policy reforms in the Nigerian banking industry. This study examines the impacts of merger on deposit money banks performance in Nigeria between 2000 and 2009. The period was characterized by financial deregulation, the Global economic crisis, and bank restructuring programs. The panel data ordinary least squares approach is the methodology employed to investigate if there is any significant effect on the performance of banks from the pre to the post merger periods, in order to detect whether bank mergers produce any performance gains in the Nigerian banking industry. The evidence shows that merger created synergy as indicated by the statistically significant increasing post-merger financial performances although banks should not jump at any merging opportunity that offers itself because the exercise is not an opportunistic one. We therefore recommend that merger being a relatively new phenomenon in the Nigerian banking environment should be given more encouragement by the regulatory authorities.