Determinable Factors Affecting Commercial Banks Deposit: The Case of Nigeria (2000-2019)

Abstract

This study examined the determinable factors affecting commercial banks deposits in Nigeria for the period of 2000 to 2019 using panel data of listed banks. The study adopted secondary data obtained from the listed Deposit Money Banks annual reports and were analyzed. Explanatory variables of the study were proxied as Branch Network, Financial intermediation ratio, Bank size, Money Supply and Economic Growth. while Dependent variable was proxied by Deposit value of banks. The study adopted ex-post facto research design to examine the effects of bank-specific and macro-economic factors on deposit in Nigerian Deposit Money Banks. Series of diagnostic tests was carried out by the study. Panel data technique specified random effect model by Hausman test. The study found that branch network and bank size have positive and significant effects with deposit while financial intermediation ratio and economic growth have positive but insignificant effects with deposit during the study period. Also, money supply has negative but significant effect on deposit. The study therefore recommended among others that the regulatory agencies of financial institutions should continue to stimulate competition in the banking industry as increase in branch network still hold key positions in strengthening deposits and activities of the institutions to be able to compete internationally. Also, at the bank level, the improvement of the deposit of Nigerian Deposits Money Banks need to be conducted by a reinforcement of the intermediation activities of banks through central banking regulation programs that will propels financial institutions to adhere to increase in loan-to-deposit portfolio.