Listed Deposit Money Banks Research Articles

The impact of capital structure on financial performance of the listed deposit money banks: evidence from Nigeria

This paper has empirically assessed the impact of capital structure on financial performance of Deposit Money Banks in Nigeria, seven banks out of twenty one was selected for the study and the selection of these banks was made based on the consistent management policies. The empirical analysis covered the period of ten years from 2007 to 2016. The data for the study were obtained from secondary sources including the annual reports and accounts of the selected banks and linear regression statistical tool was used and the study revealed that only Returns On Equity (ROE) which is one of the components of banks’ financial performance has significant positive impact on capital structure, which is an indication that these banks have more equity capital than debt and it’s also an indication that banks with more equity capital are perceived to have more safety and such merit can be translated into higher profitability. Based on the findings, it was recommended that there should be a constant review of minimum capital requirement of deposit money banks in Nigeria to the optimal level by the apex bank. The management of the banks should constitute a strong team that would effectively manage their assets and increase it to the optimal level. This will in turn help the public to maintain confidence in the banks and also accommodate the daily needs of customers. The study also recommends that further researchers can study other variables such as working capital management, Customer satisfaction and Corporate Governance and their impact on financial performance of listed deposit money banks on the Nigeria Stock Exchange.

Effect of managerial share ownership on financial reporting quality of deposit money banks in Nigeria

Corporate governance mechanism was introduced to curtail financial manipulation and falsified financial reporting to enrich the financial reporting quality. The effectiveness of the board in its oversight function is dependent on several board attributes. This study examines the effect of the managerial share ownership on financial reporting quality of listed deposit money banks in Nigeria. Secondary method of data collection was employed to extract from the annual reports and accounts of Access Diamond Bank Nigeria Plc during the period 2015 to 2019. Descriptive statistics, Pearson correlation technique and OLS regression were utilized to analyze the study data. The study revealed that managerial share ownership has negative insignificant influence on financial reporting quality of Access Diamond Bank Nigeria Plc. The study therefore recommends that, since managerial share ownership does not play a significant role in corporate management promoting financial reporting quality, the appointment of persons in to management positions should be based on personal attributes of integrity and capability.

Macroeconomic Variables and Profitability of Deposit Money Banks Listed in Nigeria

Deposit money banks will for long remain a dominant institution in the Nigeria economy because of the vital positions they play in the allocation of the country resources. In addition, a bank must be profitable in other to carry out all of its duties effectively but the inconsistency in the fluctuation of macroeconomic indicators such as the Inflation Rate, Monetary Policy Rate and Exchange Rate still threatens the day to day activities of deposit money banks operating in Nigeria as at today. This paper investigated macroeconomic variables and profitability of deposit money banks listed in Nigeria. The paper employed ex-post facto research design. The Fully Modified Ordinary Least Square (FMOLS) model was used to investigate the relationship between macroeconomic and banks profitability. The population was 15 deposit money banks in Nigeria. The sample size focused on 10 leading listed deposit money banks on the Nigeria Stock Exchange for a period of 10-years (2009 - 2018). Data was obtained from the published abstract of statistics, statistical bulletin and published annual reports of the selected financial institutions, validated by certification of external auditors and CAMA. The study adopted the use of panel data analysis. The paper indicated heterogeneous effects exist between macroeconomic variables and profitability of deposit money banks listed in Nigeria. ROA, ROE was not really affected by the macroeconomic variables but PBT was affected by INFR and MPR. PBT (F-stat =43.00972, Adj.R2= 0.250093, p= 0.000). The paper concluded that there was a negative significant effect of these macroeconomic variables on the profitability of listed deposit money banks in Nigeria. The paper therefore recommended that government and other regulatory bodies should put in measures to ensure a decrease in macroeconomic variables.

Sustainability Reporting and Financial Performance of Deposit Money Banks in Nigeria

This study examines how sustainability reporting is useful for assessing the financial performance of listed Deposit Money Banks in Nigeria. Specifically, the study focuses on the economic, environmental and social dimensions of sustainability reporting using “Return on Assets”, “Return on Equity” and “Earnings per Share” as proxies for financial performance of Deposit Money Banks in Nigeria from 2012 to 2018. The sample of the study was restricted to seventeen deposit money banks out of twenty one Banks quoted on the Nigerian Stock Exchange as at December, 2018. The required data were collected from audited annual financial statements and “sustainability reports” of the selected Deposit Money Banks for the period. A detailed analysis of the three bottom lines of profit (economic), people (social) and planet (environmental) impact was conducted. The descriptive and least squares regression analysis were adopted for the study considering the banks’ sustainability reporting practices against the selected performance proxies. The study concludes that sustainability reporting practices of Banks in Nigeria have substantial impacts on the financial performances of Deposit Money Banks in Nigeria. The study recommends that enabling legislations should be put in place to mandate enhanced sustainability practices among all deposit money banks in Nigeria as well as facilitate meaningful evaluation and measurement of earnings, social and environmental impacts in all areas of bank operations in Nigeria.

An Evaluation of the Effect of Non-Performing Loans on the Financial Performance of Listed Deposit Money Banks: Evidence from Nigeria

An Evaluation of the Effect of Non-Performing Loans on the Financial Performance of Listed Deposit Money Banks: Evidence from Nigeria

AUDIT QUALITY, GOVERNANCE MECHANISMS AND EARNINGS MANAGEMENT OF QUOTED DEPOSIT MONEY BANKS IN NIGERIA

Corporate failures across the globe have become an issue of concern for stakeholders andregulators. Financial reporting scandals that occurred in oceanic bank, intercontinental bank andthe recent bank crises of Skye Bank in 2016 really motivated the need for this study. The studyexamines audit quality, governance mechanism and earnings management of listed deposit moneybanks in Nigeria for the period of eleven years from 2009-2019. The population of the study consistsof all the 14 listed deposit money banks in Nigeria as at 31st December, 2019. The study adoptedexpo-factor and correlation research designs, and multiple regression was employed as techniqueof data analysis. The findings of the study revealed that audit independence, managerial ownershipand board independent have significant negative impact on earnings management of quotedNigerian banks while auditor size and audit tenure have insignificant influence on earningsmanagement of listed deposit money banks in Nigeria. In line with the findings, the study thereforeconcluded that audit independence, managerial ownership and board independence havesignificant negative impact on earnings management of banks in Nigeria while audit firm size andaudit tenure have no significant impact on earnings management of listed deposit money banks inNigeria. It is therefore recommended that Nigeria listed deposit money banks should maintain theaudit fees they are paying to the audit firm or increase it as any attempt to reduce the audit fees canincrease earnings management. However managerial shareholding should be increase as it willreduce earnings management and also board independent directors on the board should beincreased from minimum of two as it will reduce earnings management of listed deposit moneybanks in Nigeria on the other hand there is no significant impact between audit firm tenure andaudit firm size on earnings management of listed deposit money banks in Nigeria. For audit firmsize the study recommended that local audit firms should be used instead of the Big 4 as the size have no effect on earnings management. Also the study recommended that for audit tenure the bankshould maintain its audit tenure as it does not have any influence on earnings management.

Internal Control and the Financial Performance of Selected Deposit Money Banks Listed in Nigeria

There is a general consensus that any organization without an Internal Control system in place is generally exposed to several threats that are capable of crumbling the organization in less or no time. Prominent amongst such threats are: Problem of incorrect financial statement and loss of the company’s assets; stealing and mismanagement of organizational vital documents which may be done by an employee to take undue advantage. This study investigated the impact of internal control on financial performance covering the period of 10 years (2009-2018).The study employed an ex-post facto research design which is based on secondary data obtained from the fifteen (15) selected deposit money banks listed in Nigeria stock exchange. Pooled regression analysis was used while an inference were drawn at 5% significant levelThe study findings showed that board independence is positive but insignificant to financial performance (β=0.021; P–value > 0.05). More so, on compliance with CBN regulatory framework have positive and significant influences on the financial performance (β = 0.051; P -value<0.05), Furthermore, risk management is negatively but insignificant influences the financial performance of listed Deposit Money Banks in Nigeria (β = -0.002; P–value < 0.10) while internal communication of information positively and significantly influences the financial performances of listed Deposit Money Banks in Nigeria (β = 0.820; P–value<0.05) The study concluded that there is insignificant effect of internal control on the financial performances of listed Deposit Money Banks in Nigeria. The study recommended that banks must have an independent Board of Directors and its committee as a Corporate Governance regulatory requirement. Besides this, an independent audit department that is well trained and staffed should be set in all the branches of the banks to facilitate effective implementation of internal controls. Keywords: Corporate governance, Deposit money banks, Financial performance, Internal control, Nigeria. DOI: 10.7176/DCS/10-4-07 Publication date: April 30 th 2020

Liquidity Risk and Profitability of Listed Deposit Money Banks in Nigeria

Illiquidity of firms especially banks can lead to loss of businesses thereby reducing the potentials of earnings and profitability; this is because high liquidity position of a firm helps it to meet with some obligations which lead to funding of loans and advances that could aid banks to earn income in the form of interests on loans. The study examined the effect of liquidity risk on financial performance of listed Deposit Money Banks (DMBs) in Nigeria covering a period of ten years (2009-2018).This study adopted an ex-post facto research design. The population of the study was 15 deposit money banks listed on the Nigerian Stock Exchange and employed panel regression analysis with emphasis on pooled, fixed and random effect models. Secondary data were sourced from the annual reports of the 14 selected quoted banks in Nigeria. The Hausman test was used to justify the appropriate model and inferences were made at 5 percent significant level. The findings revealed that Liquidity risk had significant effects on profitability. In particular, it was established that Liquidity risk indicators had positive and significant effects on individual profitability variables; viz: Return on equity of deposit money banks in Nigeria ( β = 49.76, p = 0.000), Return on Assets ( β = 12.87, p = 0.005) and Earnings per share ( β = 20.92, p = 0.000). The study concluded that Liquidity risk has significant effect on return on equity, return on assets and earning per share of deposit Money Banks listed in Nigeria. The study, therefore, recommended that management of banks should establish strategies to better manage their cash-flows in each product segment and maintain an optimal levels in order to earn higher returns from high volume of idle cash balances. Key words: Earnings per share, Liquidity risk management, Return on assets, Return on equity, Nigeria. Word Count: 284 words. DOI: 10.7176/RJFA/11-8-13 Publication date: April 30 th 2020

An Assessment of the Determinants of Environmental Costs of Listed Deposit Money Banks in Nigeria

This paper assesses the determinants of environmental costs of Nigerian banking institutions. Looking at the influence of profitability, company size and leverages on environmental cost such as donation, gift and developments, the population of the study are deposit money banks in Nigeria. Using purposive sampling technique, the study selected all fifteen (15) banks listed on the Nigerian Stock Exchange websites as at June 31, 2019 in which their annual reports are available to be extracted. The study utilized archival data i.e the annual report of listed banks from 2014 – 2017 to extract the needed information. Using STATA 14 software, the study conducts diagnostic tests such as heteroskedasticity, multicollinearity and Pearson correlation for data examination. Hence, multiple regression analysis was conducted to investigate the influence of profitability, company size and leverages on environmental costs. The analysis of the study showed that profitability, company size and leverages have positive and significant association with the environmental cost reported by these banks. Therefore, the study recommended that to adapt to the changing system of doing business, accountants ought to be equipped with skills and knowledge about environmental accounting and reporting, and in order to enhance competitiveness, banks must design and apply environmentally friendly strategies.&#x0D;

English

It has remained a paradox whether people will be motivated if they believe that strong effort will lead to good performance and good performance will lead to desired rewards. Studies in this area have reported conflicting findings. To this end, the study examines the effect of executive compensation and share ownership on financial performance of listed Deposit Money Banks in Nigeria. Executive compensation variables were proxied with Chief Executive Officer (CEO) Pay, Chairman&rsquo;s compensation and highest paid director, while percentage of shares owned by executive represent the share ownership. Financial performance was measured using net interest margin. Robust Ordinary Least Square regression technique was used for the estimation, while Stata 13 was employed as tool of data analysis. Secondary source of data was utilized and were obtained from the annual reports and accounts of the banks over the period 2007-2018. Robustness tests such as normality test of error term, multicollinearity and heteroscedasticity tests were conducted to validate the results. The findings reveal that, CEO Pay has significant positive effect on financial performance of banks, while chairmen compensation and highest paid director have negative influence on financial performance of banks. Furthermore, the increase in share ownership of the executives in the banking sector is an effective means through which the financial performance of the banks could be enhanced. It is therefore recommended that the management should tie the payment of CEO of the banks to performance. The regulators such as Central Bank of Nigeria and Securities and Exchange Commission) should encourage the banks management to be mindful when increasing the level of compensation paid to chairmen and highest paid directors without commensurate share ownership in the banks by them as they may become complacent towards encouraging increased financial performance. &nbsp; Key words: Net interest margin, executive compensation, share ownership and pay-performance theory.

Does Audit Committee Gender Diversity Matter in Corporate Performance of Deposit Money Banks in Nigeria?

This paper examines the effect of Audit committee gender diversity on corporate performance of Deposit money banks in Nigeria. Corporate performance in this study has been restricted to the returns accruing to investors in these banks with respect to Return on Asset, Return on Equity, and Economic value added. Most extant literature focus on gender diversity of board of directors generally, as such, creating a gap on contributions of female representation on audit committee. Eleven years annual reports and financial statements of the listed deposit money banks in Nigeria were collected and analysed using descriptive statistics. A two – step – system generalized method of moments (GMM) estimator and diagnostic tests were applied in the study. The results of the study reveal positive and non-significant effect of audit committee gender diversity on corporate performance of deposit money banks in Nigeria. The paper noted that non representation or insignificant representation of females on audit committee has affected the findings of this study. This paper also reveals the level of audit committee gender diversity as a proxy of corporate governance for an internal mechanism of governance in an emerging economy. However, the paper recommends; 1. That there be a gender – balance in the audit committee for us to have a meaningful effect of women representation on corporate performance of deposit money banks. 2. To bridge this gender gap, women should be encouraged to increase their shareholdings in the banks especially in emerging economies. 3. An increase in business and financial expertise of women on board of directors.

Karakteristike loših zajmova depozitnih banaka u Nigeriji

Credit risk is one of the biggest challenges banks in Nigeria are faced with. By implication, it is also the one with dire consequences for their operation and survival, given the fact that a series of banks' failures have significantly been brought into connection with nonperforming loans. Thus, this study examined the bank-specific and macroeconomic determinants of the nonperforming loans of the listed Deposit Money Banks (DMBs). Regression analysis involving fixed effect was adopted in order to analyze the panel data of the 10 selected deposit money banks in the period from 2008 to 2017. The findings show that the capital adequacy ratio, the size and the loans-to-total-assets ratio negatively and significantly affect nonperforming loans, whereas profitability and age were found to significantly but positively influence nonperforming loans of the Nigerian deposit money banks. More so, the liquidity ratio negatively, but insignificantly, affects nonperforming loans. However, not a single macroeconomic variable exerts a significant effect on nonperforming loans. The study recommends that banks should always deploy strategies for credit risk management by taking cognizance of the bank-specific and economic determinants of the nonperforming loans.

Risk Management and Shareholders’ Wealth Maximization

Risks are fundamentally part of business operational models; it cannot be completely eliminated and if not efficiently managed could result to loss of value. Wealth creation could only take place when the prevailing financial risks in the banking sectors are identified and carefully handled. An expost-facto study of 100 firm-year observations was conducted using ten listed Deposit Money banks in Nigeria for a period of 10 years from 2009 to 2018. The results of the multiple regression analysis carried out revealed that risk management significantly affected shareholders’ wealth of listed banks. Credit risk (NPLR) and operating efficiency risk (OPER) had significant negative effect on Market Value (MV) while capital risk and liquidity ratio (LQR) had significant positive effect on market value (MV). This study concluded that four elements of risk (credit risk, capital risk, operating risk, liquidity risk) significantly affected shareholders’ wealth of listed banks in Nigeria. Therefore, the management of the Nigerian banks should ensure that non-performing loan ratio to total loan is kept at its minimum; ensure adequate liquid fund in meeting customers demand as when needed, engage competent hands where deemed necessary in their operations to mitigate operating efficiency risk and possess adequate capital ratio in accordance with CBN minimum capitalization ratio, if possible, beyond the minimum required by the regulatory bodies.

Related Party Transactions, Off Balance Sheet Items and Earnings Quality of Listed Deposit Money Banks in Nigeria

This paper examines the impact of related party transactions, off balance sheet items on earnings quality of listed deposit money banks in Nigeria over the period of 4 years (2011 to 2014). Data were collected from annual reports of the sampled banks. Descriptive statistics and correlation analysis were employed and also Ordinary least square (OLS) robust regression technique was used as a tool of analysis using panel data. The study reveals that related party transactions are positively and significantly related to earnings quality. On the contrary, off balance sheet items were found to be negatively and insignificantly related to earnings quality. Based on the findings, the study concluded that related party transactions have significant impact on the earnings quality of the Nigeria deposit money bank. The study recommends that Management of the Nigeria money deposit banks should be more aggressive towards the number of genuine related party transactions that can add value to their firms when making financial decision because it is likely to have positive effects on the quality of their earnings.

Effect of Corporate Governance on the Performance of Listed Deposit Money Banks in Nigeria

The study considered the implication of corporate governance on the performance of quoted deposit money banks in Nigeria. The deterioration of banks asset portfolios, largely due to distorted credit management, was one of the main structural sources of corporate governance problem. To a large extent, this problem was the result of poor corporate governance in countries’ banking institutions and industrial groups. Poor corporate governance, in turn, was very much attributable to the relationships among the government, banks and big businesses as well as the organizational structure of businesses. The objective of the study is to investigate the connection between corporate governance proxy (Board size, Board composition and Firm size) and Return on Asset (ROA) of quoted deposit money banks in Nigeria for a period of 5 years (2015-2019). Data for the study was obtained from secondary sources i.e. audited annual reports of fifteen (15) listed banks on floor of the Nigeria Stock Exchange (NSE, 2017). The study employed panel data analysis using regression model. The Statistical Package used was Stata 11 version. Findings showed that there is significant relationship between board composition, board size and firm size and the ROA of deposit money banks in Nigeria. Following from the above conclusion of the study, it was recommended that to improve corporate governance issues in deposit money banks in Nigeria, focus on board composition, board and firm sizes has to be intensified as it was positively related to return on asset of Deposit Money Banks.

Firm attributes and share price fluctuation of deposit money banks listed in Nigeria

This paper examined firms’ attributes impact on the fluctuation of share prices of listed deposit money banks in Nigeria. Ex-post facto research design was employed, and 13 deposit money banks firms were selected out of 15 from 2006-2016. Descriptive statistics were presented, and correlation analysis was conducted to understand the degree of relationship among the variables. Ordinary least Squares regression was used to ascertain the combined impact of the explanatory variables on the share prices. The study finds four firms’ attributes (dividend ratios, book value, growth and liquidity) to have statistically significant effect on share prices. Companies with high dividends and asset growth as well as low liquidity and book values are more likely to experience higher share prices; hence, the need for investors to be aware of these attributes in making investment decisions. The findings contribute to the existing literature by extending the study to the banking industry.

The Determinant of Equity Share Price and the Listed Deposit Money Banks in Nigeria

In this study, the researcher examined the financial variables influencing the share price of listed deposit money banks in Nigeria. An ex-post facto research design was employed with the population consisting of all fifteen (15) listed deposit money banks on the Nigeria Stock Exchange (NSE), and a sample of twelve (12) listed deposit money banks on NSE was taken using filter criteria and judgemental sampling techniques. Secondary data used were sourced from the annual reports of the sampled banks and GTI Securities Ltd. for five years period from 2013-2017. Ordinary Least Square (OLS) was used to analyze the data. The results of the multiple regression revealed that the dividend payout ratio and price-earnings ratio have a significant positive relationship with the share price. The results also showed that dividend yield has a significant negative association with share price; the book value per share has no meaningful relationship with the share price. This study recommends that the shareholders in the deposit money banks should be guided by industry financial ratios, especially the profitability measures of price-earnings ratio and dividend payout ratio, as they are critical factors in predicting share price behavior.

Risk Management and Financial Performance of Listed Deposit Money Banks in Nigeria

The study examined the effect of risk management on the financial performance of Deposit Money Banks in Nigeria. The study employed ex-post-facto research design. The study population consisted of 26 DMBs from which 10 were selected using purposive sampling technique. Secondary data were collected from financial statements. Panel data regression was used to estimate the parameter coefficients. Findings revealed that Debt Equity Ratio, Asset Liability Maturity Mismatch and Capital Adequacy Ratios had significant negative, positive and negative effects on Return on Assets respectively. Loan Deposit Ratio and Type of Auditor had significant negative and positive effects on Return on Equity respectively. Also, Interbank Funding Ratio had significant positive effect on Return on Equity. Risk Asset Portfolio of the DMBs was reasonably diversified with diversification index above 0.6. Capital adequacy ratio of the DMBs averaged 0.22. The study concluded that the effective risk management among the DMBs impacted their financial performance positively. The study recommended that DMBs should determine their optimum loan-deposit mix as well as pay special attention to their balance sheet mismatch to determine the most appropriate bounds of tenors between deposit and risk assets. Also, the Central Bank of Nigeria should bring down the cash reserve ratio that restricts credit creation and causes high cost of funds. The Central Bank of Nigeria should also pay interest rate on cash reserves held by the bank.

Effect of Non-Financial Motivation on Employee’s Performance of Deposit Money Banks Nigeria

The aim of this study is to assess the effect of motivation on Employee's efficiency and productivity in Nigeria in listed deposit money banks. A descriptive survey research method was used for this study. The population covered GT Bank, UBA and First Bank Yola Branch staff strength is put at 480 people, a total of 214 staff was sampled using Krejice and Morgan table. 214 questionnaires were administered to the respondents which served as instrument for data collection. The data collected were analysed using simple percentage and linear regression analysis. The linear regression analysis was used to test hypotheses about the distribution of observations into categories. The outcome of this research suggested that no significant effect has been found by non-financial motivation on competency of workers. Even productivity of staffs has not been seen connected with non-financial motivation. Moreover, employee productivity and efficiency have no significant association. The study concluded that the workers motivational processes in selected Bank have undergone tremendous change. The study however recommended that staff development to enhance productivity and promote self-fulfillment should be encouraged as a matter of deliberate policy and the management should strive at introducing staff bus; cafeteria building so as to provide better and suitable relax environment, and create a work climate that can promote efficiency and productivity.

Audit Committee and Earnings Management of Listed Deposit Money Banks in Nigeria

There exists divergence of opinions in the literature on the impact of audit committee on earnings management. The mixed opinions make the direction of the impact ambiguous. This study therefore investigates the impact of audit committee on Earnings Management of listed deposit money banks in Nigeria. Earnings management was measured using Chang, Yat-sen, Shen and Fang (2008) Discretionary Loan Loss Provision Model. The study adopts correlational research design of which secondary data were extracted from the 13 sampled deposit money banks listed on the Nigerian Stock Exchange for the period 2008-2017. The study employed Random Effects Model (REM) to analyze the data. The results revealed that audit committee financial expertise and audit committee busyness have negative significant impact on earnings management, audit committee tenure has a negative insignificant impact on earnings management. Audit committee meeting and audit committee share ownership have positive insignificant impact on earnings management. The study concludes that audit committee expertise and busyness improve the quality of financial report of deposit money banks in Nigeria. The study recommends among others that the board should ensure that members with financial expertise are appointed into audit committee as it enhances the earnings management of the banks. The inclusion of more directors with multiple directors on the audit committee as their wealth of experience helps in reducing earnings management thus improving the earnings management of the banks. Keywords: audit committee, earnings management, audit committee busyness, financial expertise, share ownership meeting, tenure, DOI : 10.7176/RJFA/10-16-13 Publication date : August 31 st 2019