Abstract
This study examines the nature of the relationship between asset growth rate and growth in such output variables as total cost, total income and net profit In the Nigerian banking industry. Based on the data of 25 quoted Nigerian banks, three linear regression models were estimated complemented by descriptive data analysis. We found among others that majority of Nigerian banks adopt the conservative asset growth strategy (below group average) but experience below-average cost and profit values. The few banks adopting aggressive asset growth strategy are cost-inefficient, but profit-efficient. We also find a significantly positive relationship between asset growth rate and growth in total cost, total income and net profit. Overall, growth in the output variables lags behind growth in total assets, with growth in net profit recording the lowest rate. The pursuit of an optimal growth strategy by bank management and regulatory authorities matters in an industry characterised by high cost profiles and low profits.Global Journal of Social Sciences Vol. 6 (1) 2007: pp. 11-18
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