Deposit Money Banks Research Articles

EFFECT OF CREATIVE ACCOUNTING PRACTICES ON CREDIT RISK MANAGEMENT OF SELECTED DEPOSIT MONEY BANKS QUOTED IN NIGERIA

Sound credit risk management is one of the criteria for deposit money banks to carry out efficient financial intermediation in developed, emerging and developing economies including Nigeria. However, the manipulation of bank financial data by fraud utilizing inventive accounting techniques led to the poor credit risk management and collapse of deposit money institutions in Nigeria. The objective of the study is to examine the effect of creative accounting practices (cash assets structure, equity capital structure, loan structure, deposit liability and accrual quality) on credit risk management of selected deposit money banks quoted in Nigeria. The population of the study comprised of all the nineteen (19) listed deposit money banks as at December, 2021 while a targeted random sampling technique was adopted to select the sample size of seven (10) failed banks and seven (7) surviving deposit money banks listed in Nigeria Stock Exchange (NGX). Ex post facto research design was adopted using dataset for the period 2006–2021 which were collated from the annual reports and financial statements of the listed deposit money banks. The data collected were analyzed using mean scores and Panel Regression Model method. The analysis revealed that for surviving banks, creative accounting had a significant influence on credit risk management (Adj.R2 = 0.182, Wald-Test= 4.44 :p < 0.05). Therefore, the study recommended that the management team of the banks should ensure that credit portfolio of the deposit money banks is prudently managed to grow year on year in the right mix and without contravening the statutory guidelines to avoid bad and doubtful loan classifications so as to achieve sound credit risk management.

An Exploration of the Impact of Mergers and Acquisitions in the Nigerian Banking Sector: A Study of Access Bank and Diamond Bank

Purpose: The purpose of this study was to evaluate the impact of mergers and acquisitions on the financial performance of companies.
 Methodology: Two Nigerian deposit money banks, Access Bank and Diamond Bank were considered as case study to evaluate if they could perform better as a result of corporate restructuring when using merger and acquisition as a technique. The banks were considered because they had more than one M & A transactions between 2005 and 2019. The study carefully considered financial parameters such as return on assets, return on equity to draw conclusion. Quantitative research methodology was used as predestined by the purpose of this research. Secondary data in the form of published accounts were reviewed for the analysis. Descriptive statistics was employed for the data analysis, and the independent sample test was performed to assess the study's hypothesis. Additionally, the association between the transactions and the performance of the business was examined using Pearson's correlation coefficient.
 Findings: The study found that merger and acquisition may increase a company's profitability but does not necessarily translate into increase in shareholder value. Businesses must manage the acquired assets and debts efficiently to increase shareholding value. With regard to the effect of mergers and acquisitions on the financial performance of deposit money banks, this study supplements the empirical data already available on specific financial indicators that improve post mergers and acquisitions performance.
 Recommendation: It is recommended that the acquired asset profile needs to be effectively utilized so that the return on assets and returns on equity is improved after the merger.

Financial Leverage and Market Value of Listed Deposit Money Banks in Nigeria

Purpose: The study examined the effect of financial leverage on market value of listed Deposit Money Banks (DMBs) in Nigeria. Specifically, the study examined the effect of short term debt ratio, long term debt ratio, and debt to assets ratio on market value of listed DMBs in Nigeria.
 Methodology: The study adopted the ex-post facto research design. A sample of 12 DMBs was drawn from a population of 14 DMBs listed on the Nigerian Exchange Group using the filtering method. Data were sourced from annual reports and accounts of the sampled DMBs in Nigeria. The study period covered ten (10) years from 2011-2020. The random effect regression model was used for data analysis, based on the recommendations of the Hausman Specification Tests results.
 Findings: The results of the study suggested that while short term debt ratio has an insignificant positive effect on market value of DMBs in Nigeria, long term debt ratio has a perverse and insignificant effect on market value of DMBs in Nigeria. The result of the study further ascertained that debt to assets ratio has a significant positive effect on market value of DMBs in Nigeria.
 Recommendations: The study, therefore, recommended that DMBs in Nigeria should employ a higher proportion of debt financing especially when the funds will be used to increase assets utilization. The study also recommended that listed DMBs in Nigeria should prioritize short term component of financial leverage in their financing mix.

The Effect of Intellectual Capital on the Financial Performance of Deposit Money Banks in Nigeria.

This study evaluates the relationship between intellectual capital and Nigerian deposit money banks' financial performance. Specifically, it aims to establish nexus between two proxies of intellectual capital, structural and human capital, and two facets of financial performance, return on assets and earnings per share. All the deposit money banks registered in the Nigerian stock exchange constitute the study population; however, only eight banks that published the required data between 2012 and 2020 were sampled. The study adopted Pulic's (2004) method of measuring intellectual capital and Hamdan's (2018) and Ozkan et al. (2016) model specifications. The model and collected data were analysed using simple regression analysis. The research revealed a significant relationship between structural capital and return on asset (ROA). It also found a significant association between human capital and earnings per share (EPS). Based on the result, we recommend that Nigerian bank managers and policymakers integrate intellectual capital into their decision-making process and pay more attention to this alternative source of capital to enhance their financial performance. Also, the management of banks should provide a conducive work environment, improve the welfare packages of their staff and ensure an excellent in-house training program.

Earnings Management and Financial Performance: The Moderating Role of CEO Competency

This study examines the influence of earnings management on the financial performance of financial listed firms. It also investigates the moderating role of CEO competency on the relationship between earnings management and financial performance. The study argues that the competencies of CEOs are important to reduce the discretionary accruals of firms. Using a sample of deposit money banks in Nigeria, the study adopts the panel regression estimator to analyze the testable hypotheses of the paper. In support of the agency theory, the study finds evidence that earnings management reduces financial performance. On the contrary, the interaction of CEO competency and earnings management negatively reduce financial performance, indicating that CEOs use their competencies to entrench themselves for their personal interests more than the interests of shareholders. The magnitude of the combined CEO competency and earnings management affecting financial performance is less than the sole effect of earnings management. Thus, while we find support for the agency theory on earnings management, our study establishes little support for CEO competency to erode earnings management. Hence, we call for a broader CEO monitoring and resource mechanisms such as CEO compensation and CEO social capital to reduce the negative impact of earnings management on financial performance of financial institutions.

Equity Financing and Financial performance of Listed Deposit Money Banks in Nigeria

Equity Financing and Financial performance of Listed Deposit Money Banks in Nigeria

Board Size And Retained Earnings of Deposit Money Banks in Nigeria

The study examined board size and retained earnings of deposit money banks in Nigeria. The objective of the study was to ascertain the relationship between board size and retained earnings of deposit money banks in Nigeria. The study adopted an ex-post-facto research design, covering the period between 2010 and 2019. Secondary data were extracted from the annual reports and accounts of sampled deposit money banks in Nigeria. Total assets, total deposits, statutory reserves, and number of branches, were the control variables of the study. Multiple regression and covariance analysis were used for data analysis. The covariance analysis revealed that total asset (p-value < 0.05), total deposit (p-value < 0.05), and number of branches (p-value < 0.05) have a strong and positive relationship with retained earnings (80% approx., 78% approx., 64% approx. respectively). Statutory reserve (p-value < 0.05) and board size (p-value < 0.05) have a strong and negative relationship with retained earnings of deposit money banks in Nigeria with the following coefficients Statutory reserve 73% and board size 53% approx. The findings imply that as a total asset, total deposits, and the number of branches are increasing, the banks’ retained earnings also increase significantly and vice versa. On the other hand, as statutory reserve and board size are increasing, banks’ retained earnings decrease significantly. Hence, these variables can be used to predict and make decisions on retained earnings of deposit money banks in Nigeria. The study, therefore, recommends that deposit money banks in Nigeria should keep a small or moderate board size since an increase in board size affects their retained earnings negatively.

Audit Committee Attributes and Share Price Reaction of Listed Deposit Money Banks in Nigeria

This study investigated the effect of audit committee characteristics on share price reaction of listed Deposit Money Banks (DMBs) in Nigeria. Specifically, the study sought to examine the effect of audit committee independence, expertise, size, frequency of meetings and gender diversity on share price reaction of listed DMBs in Nigeria. The study adopted the ex-post facto research design. The study used a sample of 12 DMBs from a population of 14 DMBs listed on the Nigerian Exchange Group using the filtering method. Data were sourced from annual reports and accounts of the sampled DMBs in Nigeria. The study period covered ten (10) years from 2011-2020. Pooled Auto Regressive Distributive Lag (ARDL) Model was used for data analysis. The results of the study suggested that audit committee independence, size, frequency of meetings and gender diversity have a perverse and significant effect on share price reaction of DMBs listed in Nigeria. The result of the study also established that audit committee financial expertise positively but insignificantly affects share price reaction of DMBs listed in Nigeria. The study, therefore, recommended that financial expertise of the audit committee members should be given utmost attention by the board since it exerts a positive effect on share price reaction. This is supported by the requirements of CAMA 2020 which states in section 404 subsection (5) that all audit committee members should be financially literate and at least one of them should be a member of a professional accounting body established by an Act of the Nigerian Parliament. The study also recommended that DMBs should strive to maintain a small audit committee size below the stipulated maximum number of 5 as stipulated by CAMA 2020 for effective performance.

Remuneration Packages of Executive Directors and Financial Performance of Money Deposit Banks: Evidence from Nigeria

The robust and expensive lifestyles of bank executive directors have drawn negative criticisms stakeholders in the banking sector. This was particularly so when the performance of such banks were not at par with their lifestyles. This study was therefore conducted to investigate the effect of pay packages offered to executive directors on the financial performance of deposit money banks. The main objective of the study was to determine whether compensations packages made to the executive directors in deposit money banks are able to motivate them to better productivity. Executive compensation was proxied by cash, bonus, stock and perquisites of office compensation. The dependent variable was proxied by return on liquid asset. The study used ex-post facto research design. Data were extracted from the financial statements of five randomly selected deposit money banks in Nigeria for years 2015 to 2019. The data were analysed with correlation and regression models and SPSS version 20 was used to analyse the data. The results of analysis show that the return on liquid asset were significant and positively related to various proxies of executive compensation. However, though the result shows a positive relationship between cash compensation and return on liquid asset, it was not significant. The study concluded that compensation packages made to the executive is significantly related to the financial performance of deposit money banks. The study recommends amongst others that a uniform compensation packages be developed for all deposit money banks by the regulatory authority in Nigeria.

Voluntary Disclosures and market value of deposit money banks in Nigeria

Companies all over the world are now realizing that the disclosure of only mandatory information does not give a complete measurement of firm’s value. Thus, the disclosure of mandatory and voluntary information together gives a balanced view of the companies’ performance and value over time. The main objective of this study was to examine the effect of voluntary disclosures on firms’ value taking samples from deposit money banks listed on the floor of the Nigeria Exchange Group from 2012-2021. The independent variable of the study being voluntary disclosure was proxied by social donations & gifting disclosure (SODD) and eemployee’s health and safety disclosure (EHSD) while the dependent variable being firms’ market value was proxied by Tobin’s Q. Furthermore, in line with related extant literature, the study controlled the model goodness of fit by employing the variable of return on equity (ROE). The research design adopted for this study was ex post facto, purposive sampling technique was employed and secondary source of data used was obtained from the studied companies’ annual report and Nigeria Exchange Group fact book. Dummy Least Square Variable regression was adopted to analyze and test the two hypotheses formulated for the study. The findings of the study revealed that social donation and gifting disclosure has a positive significant effect on the market value of deposit money banks while employee health and safety disclosure has an insignificant negative effect on market value of listed deposit money banks in Nigeria. Thus, based on these findings, it was concluded that social donations and gifting disclosure has a significant effect while employee health and safety disclosure has insignificant effect on market value of listed deposit money banks in Nigeria. value. It was therefore recommended among others that the apex bank should set sector specific benchmarks against which individual banks should compare their voluntary disclosure practices and make improvements when the need arises.

Effect Of Statutory Reserve and Bank Branches on Revenue Reserves of Deposit Money Banks in Nigeria

The study examined the effect of statutory reserves and bank branches on the revenue reserves of deposit money banks in Nigeria. Retained earnings were the dependent variable. The study adopted an ex-post-facto research design, covering the period between 2010 and 2019. Secondary data were extracted from the annual reports and accounts of sampled deposit money banks in Nigeria. Multiple regression analysis was used for the test of hypotheses. The study of the regression analysis revealed that statutory reserves have a significant and negative effect on the revenue reserve of deposit money banks in Nigeria. Furthermore, the number of branches of deposit money banks had no significant effect on their revenue reserves. The findings imply that statutory reserves can be used to predict and make decisions on retained earnings of deposit money banks in Nigeria. The study, therefore, recommends that banks focus on working on technicalities that will enable them to reduce their statutory reserve. However, the CBN should give the banks more freedom to have in-house retention than reserving with the CBN. This is because when it is reduced, there will be more loanable funds at the disposal of deposit money banks, and their profitability chances increase as well. Also, the insignificant effect of the number of branches indicates that the firms should not see an increase in the number of their branches as the solution to higher revenue reserves

International Financial Reporting Standards [IFRS] and Corporate Governance: A Survey of Nigerian Deposit Money Banks [DMBs

International Financial Reporting Standards [IFRS] and Corporate Governance: A Survey of Nigerian Deposit Money Banks [DMBs

International Financial Reporting Standards [IFRS] and Corporate Governance: A Survey of Nigerian Deposit Money Banks [DMBs

The study examined the effect of the International Financial Reporting Standards [IFRS] implementation on the corporate governance of Nigerian banks. The specific objectives of the study were to examine the effect of IFRS implementation in promoting corporate accountability by banks; the effect of IFRS implementation in strengthening the financial regulatory framework of banks and the effect of IFRS implementation in enhancing corporate disclosure of banks. The study adopts the descriptive survey research design. The sample comprised 144 respondents in banks in the chosen geographical area. The results showed that IFRS implementation promoted corporate accountability in Nigerian banks. There is a significant effect of IFRS implementation in strengthening the financial regulatory framework of banks. Lastly, IFRS implementation has enhanced the corporate disclosure of banks. The study recommends that CBN should further enact rules that promote accountability in the banking sector. Stiff penalty for late default on issuing annual reports, not allowing any single individual to acquire more than 20% shareholding, among others. The sustainability disclosure guideline by the NSE to promote corporate social responsibility among quoted companies should also be enforced for banking institutions. The harmonisation of the diversified corporate governance codes should be further revisited. A clear distinction between the duties and responsibilities of the CBN and FRC may further avoid overlap of functions which may lead to friction.

Audit Quality and Value Relevance of Listed Deposit Money Banks’ Financial Report in Nigeria

This study examined the effect of audit quality on value relevance of commercial banks’ financial report in Nigeria. The study employed ex post facto research design. Data for analysis was gotten from the published financial reports of 13 listed commercial banks spanning a period of 5 years (2017 to 2021). The Ordinary Least Square (OLS) method using multiple regression model was used to analyze the data generated with the aid of Statistical Package for the Social Sciences (SPSS Version 20). Findings from the study revealed that Audit fee has a positive significant effect on value relevance of reported earnings per share of the listed commercial banks in Nigeria. Further findings revealed that Audit firm size has a positive insignificant effect on value relevance of reported earnings per share of the listed commercial banks in Nigeria and finally, it was revealed that Audit tenure has a positive insignificant effect on value relevance of reported earnings per share of the listed commercial banks in Nigeria. Based on the findings the study recommends that, commercial banks should endevour to balance the costs of audit by paying prudent fee for audit services such that it will not impede or influence the external auditors judgement on the reported financial figures in order to minimize the risk of reduced independence. Such practices if not considered that lead to audit risk of poor judgement that might distort the value relevance of financial reports of the banks thus; lead to a situation where investors base there judgement on reported earnings figures that are inappropriate.Also, commercial banks should not maintain the services of a particular audit firm over a long period of time as this impedes the quality of audit service offered as a result of the familiarity is developed between the audit firm and client overtime. Keywords: Audit Quality, Audit Size, Audit Fee, Audit Tenure, Value Relevance and Deposit Money Banks.

Ownership Structure and Dividend Policy of Listed Deposit Money Banks in Nigeria

Ownership Structure and Dividend Policy of Listed Deposit Money Banks in Nigeria

CORPORATE REPUTATION MANAGEMENT PRACTICE AND ORGANISATIONAL PERFORMANCE OF DEPOSIT MONEY BANKS IN DELTA STATE

The study examined the effect of corporate reputation management practice on organisational performance of deposit money banks in Delta State. The research was conducted in five selected deposit money banks in two major cities (Asaba and Warri in Delta State). The cross-sectional survey research design method was adopted for the study. The study employed the stratified random sampling technique. The study used structured questionnaire as instrument of data collection. To establish the reliability of the instrument, a test-retest method was employed. The descriptive statistics, correlation and multiple regression analysis was used. Findings showed that 70% of the change in organisational performance was brought about by corporate reputation management practice. The study concluded that corporate reputation management practice has significant positive effect on organisational performance in deposit money banks in Delta State. Corporate social responsibility, corporate governance, and workplace environment has significant positive effect on organisational performance in deposit money banks in Delta State. The study recommended amongst others that banks should create a more conducive working environment, for both employees and customers in order to enhance service delivery. The study demonstrated that the workplace environment is one of the most important aspects that influence employee satisfaction, motivation and organisational performance.
 Keywords: Corporate Governance, Corporate Social Responsibility, Corporate Reputation Management, Workplace Environment.

Digital Accounting Practices and Financial Performance of Listed Deposit Money Banks in Nigeria

The study investigated the relationship between digital accounting practices and financial performance of Nigerian deposit money banks. Both primary and secondary sources were used in the study's examination of the research on Nigerian deposit money banks. The collected data was subjected to regression analysis. Regression analysis was used to predict the value of the dependent variables based on the knowledge about the explanatory factors used to assess the effect on the dependent variables. The eleven (11) deposit money banks registered on the Nigerian Exchange Group (NXG) were the population for this research; however, only nine (9) of such banks were actually sampled and included in the analysis. Among the study's results were positive connections between cloud accounting (CLA) and return on assets; also, blockchain technology had a positive relationship with return on assets. Therefore, the study concluded that the adoption of electronic accounting practices and financial performance of Nigerian deposit money banks. As a result, we propose digital activities in the banking industry and call for more research into digital activities in businesses since doing so may reveal even bigger investment prospects for investors among other things.

Audit committee independence and audit quality of listed deposit money banks in Nigeria

Audit committee independence and audit quality of listed deposit money banks in Nigeria

Audit Quality and Earnings Management: A Case of Nigerian Deposit Money Banks

Audit Quality and Earnings Management: A Case of Nigerian Deposit Money Banks

Effect of Interest Expenses on Retained Earnings of Deposit Money Banks in Nigeria

Effect of Interest Expenses on Retained Earnings of Deposit Money Banks in Nigeria