Banking Industry In Nigeria Research Articles

Modeling Bank Capital Adequacy Dynamics and Liquidity Risk Management, Empirical Evidence from the Nigeria Commercial Banks

This study examines the effects of Capital adequacy on liquidity risk management practices in Nigeria. The secondary time series data were obtained from the annual reports of the fifteen (15) quoted commercial banks in Nigeria as compiled from the Nigeria Stock Exchange Fact book for the period 1989 to 2015. The independent variables capital adequacy are categorised under Tier I, Tier II to total risk assets, capital conservation buffer (CCB), Minimum total capital (MTC) and counter-cyclical Buffer (CCyB). The dependent variable Liquidity risk was modelled with the five variants of capital adequacy measures. The multivariate regression equation were specified and results obtained based on E-views version 9.0. The OLS and cointegration result shows existence of a short run and long run equilibrium relationship between LIQR and capital adequacy (CAR). The Unit root test shows that the variables were stationary at level and first difference i.e. 1(0) and 1(1). The VAR test indicates that fluctuations in liquidity risk are significantly influenced by capital adequacy measures. The granger-causality test shows a unidirectional link between liquidity risk and capital adequacy. The impulse response function (IRF) shows that liquidity risk responded negatively to capital adequacy measures. The variance decomposition results indicates that LIQR accounted for 78.73% of own shocks at the short run, while at the long run accounted for 14.76%, the rest of 86.34% were distributed among the capital adequacy measures with CCB accounted for the highest. This study concludes that transition to Basel III will further mitigate the concentration of liquidity risk and avert systematic failure in the Nigeria banking system. It is recommended that risk management should be a matter policy focus and priority among regulators and operators in Nigeria banking industry.

A New Data Mining Application to Assess the Impact of Organizational Culture on Performance in Nigeria's Banking Industry

A New Data Mining Application to Assess the Impact of Organizational Culture on Performance in Nigeria's Banking Industry

English

English

Compliance with Regulations: Path to Adequate Corporate Governance in the Nigerian Banking Industry for Business Sustainability and Enhanced Financial Performance

Compliance with regulations remained a significant impediment in the financial industry globally, especially in the Nigerian Banking Industry. Corporate governance is obligatory, but adherence to rules is a puzzle in the banking industry, which has impacted on the investors and financial performance considering fines and penalties incurred by the banks where sanctioned. Regardless, compliance issues are global, and regulation needs improved regulatory momentum in the Nigeria financial sector to ensure no ambiguities in the rules of law for its useful understanding and implementation. Consequently, in the current global market, compliance is the only language to fortify the financial industry from any future collapse due to the disposition of the corporate financial leader to their business and codes of corporate governance. The purpose of this qualitative exploratory multiple case study was to explore compliance mitigants corporate financial leaders need to implement to ensure adherence to regulations to enhance business sustainability and organizational financial performance. The banking industry is one of the pillars of the economy; however, in Nigeria, average depositors feared the bank due to the constant failure of the banks. So, the importance of this paper is to contribute to the issue of compliance and its management to avoid an impending collapse in the industry. The sample for this study was 18 corporate financial leaders and regulators with at the least ten (10) years of banking and regulatory experience at the top management level involved in strategic positions with a varied portfolio in the banking industry in Nigeria. The Agency theory served as the conceptual framework for the study. Data collection included semi-structured face to face interviews and review of circulars and policies issued by regulators and internal policies of the banks. Data were transcribed, analyzed, and validated using member checking and triangulation. The Participant signed an informed consent form before the commencement of the data collection. The finding revealed that compliance is improving in the Nigerian financial industry. However, there are still issues of noncompliance and problems related to conflict of interest until 2018 which affects the financial performance of the banks on the long run and may lead to financial distress supported by Agency theory as the conceptual framework. The regulators may use the findings to improve on their supervisory, monitoring strategy and guard ambiguity in regulations to ensure that corporate financial leaders are not just complying with the part of the code they are comfortable with but all aspect of the codes of corporate governance and the implementation in alignment with best practices globally. The corporate financial leaders may use the findings to curb the strategies that could impact on their business to the point of collapse and imbibe the spirit of the code to ensure the company adhered to regulations for sustainability and going concern of the company to enhance their financial performance for improved reputation to attract potential investors.

Challenges and Prospects of Non-Interest (Islamic) Banking System in Nigeria

Challenges and Prospects of Non-Interest (Islamic) Banking System in Nigeria

Investigating the Effect of Convenience, Accessibility and Reliability on Customer Satisfaction in the Nigeria Banking Industry

This study investigates the effect of convenience, accessibility and reliability on customer satisfaction in the Nigeria banking industry. The target populations of the study are customers of Jaiz Bank, BUK Road Branch in Kano State, Nigeria and the stated bank branch serves as the scope of the study. The population of the study consists of 10,580 customers of the focused bank in question, and 371 respondents make up the study sample size and it was captured out of the stated population which was obtain through research advisors table of sample size determination. Structured questionnaire was employed as the method of data collection, while regression analysis was employed as the method of data analysis that tests the hypothesized hypotheses of the study. The result indicates that electronic accessibility and convenience has significant and positive effect on customer satisfaction. The result of the study also found that electronic reliability has negative effect on customer satisfaction. This study recommends that banks should enlighten and educate customers judiciously on the use of electronic services such as SMS (Mobile) banking, web/internet banking and e-switch, POS banking services that are not well patronized. Internet banking should be well developed in other to face competition in the banking industry and maintain profit.

Oil Price Dynamics And The Nigerian Banks Profitability

This study evaluates the impact of oil price shocks on the banking sector profitability of an oil-dependent, bank-based Nigerian economy. The study used a dataset of 12 commercial banks that controls about 76 per cent of the Nigeria banking industry assets for a period between 2006 and 2015 and covering two major price shock events. The study tested the impact of oil price shocks on Nigerian banking system profitability as well as the mechanism of transmission (direct or indirect) using system generalised method of moment (GMM). The study found a significant impact of oil price shocks on the Nigeria bank profitability and indicated that the transmission mechanism is direct unlike previous study on the Middle East and North African (MENA) countries, which indicated that the transmission mechanism is via indirect macroeconomic variables. Oil and gas sector concentration appears to be the key driver of the direct transmission mechanism. The transmission of the impact of oil price shocks to the Nigeria commercial bank is through the Domestic Systemically Important Banks (DSIBs). The study also found the existence of profit persistence phenomenon in the Nigeria banking system. The banking institutions should develop a lending portfolio diversification strategy that will mitigate against portfolio concentration in the oil and gas sector. There is also the need to implement revenue diversification strategy to enhance their non-interest generating income and thereby reducing dependence on interest income from the lending portfolio. Most importantly, financial institutions need to manage the procyclicality of their lending strategy and maintain a strong lending standard in order to minimise adverse selection during the positive oil price shocks so that during the reversal or negative oil price shocks the quality of their portfolio will still be high. This study also provides insights for the Central Bank of Nigeria in articulating macro-prudential policies to address financial fragility and drive financial system stability as banking profitability has been identified as an important predictor of financial crises. Furthermore, the framework on domestic systemically important banks (DSIBs) must be proactively implemented as the study indicates that DSIBs play significant role in channelling the impact of oil price shocks on the overall banking system.

SUSTAINABLE DEVELOPMENT: THE ROLE OF PRECAUTIONARY PRINCIPLE IN ADVANCING ISLAMIC BANKING IN AFRICA

Principle 16 of the Rio Declaration on Sustainable Development defined Precautionary Principle as the taking of preventive measures without having to wait until the reality and seriousness of the threat become fully known. The study examines the measures adopted by Islamic Banks in Nigeria to create essential mechanisms to achieve sustainable development. The study identifies the relationship between Islamic banking and sustainable development. The qualitative approach is used. The qualitative approach includes content, deductive, and inductive analysis as well as comparative method. The references used in this study are the primary and secondary book. Both materials are analysed accordingly to get the information related to this study. The study found that the precautionary principle plays an important role in the area of environmental law and Islamic banking in Nigeria. The study recommends the adoption of the precautionary principles in promoting Islamic banking system in Nigeria.

Working capital management and bank performance: empirical research of ten deposit money banks in Nigeria

Working capital management is germane for the success of the banking industry in Nigeria, especially the current state of the sector, which is engulfed with the effect of the global decline in oil price that has resulted in non-performing loans, deterioration of the bank asset quality, laying-off of staff amongst others. This is one of the reasons why the profitability of the banking sector deeply depends on the efficient management of a bank’s working capital. Therefore, the objective of this study is to examine how profitability of banks can be enhanced through the working capital management. To empirically carry out the analysis, panel data which consist of ten (10) deposit money banks in Nigeria for seven years (2010–2016) employing the panel fixed effect, panel random effect and the pooled OLS for the two models, which were used as proxies for bank profitability, which includes return on asset (ROA) and return on equity (ROE) to examine the best measure for bank profitability, with the indicators of working capital; net interest income, current ratio, profit after tax, and monetary policy rate. Results of the study showed that working capital management has a significant effect on the profitability of the selected banks and that return on asset is a better measure for bank profitability. Therefore, the study recommends that there should be a periodic review of the minimum capital base of the Nigerian deposit money banks so as to mitigate the effects of inflation and inculcate the consequence of time value of money, because the purchasing power of one (₦1) naira or one ($1) dollar today would not be sufficient to purchase what it can purchase today for tomorrow.

Assessing the Influence of Islamic Banks' Products' Quality Features on Customer Satisfaction in Nigeria

Islamic banking is essential in today’s competitive banking markets. Research in Islamic banking worldwide is focussed mainly on how distinct is Islamic banking from the conventional banking. This research aims at investigating the factors responsible for the satisfaction of Islamic banking customers. The study seeks to identify the Islamic banking products’ quality features as they relate to customer satisfaction, to examine the level of customer satisfaction on Islamic banking products’ in Nigeria. Three research questions and four hypotheses are formulated to guide the study. The methodology employed was a quantitative approach using a questionnaire as a tool for the collection of data. The respondents for this study are customers of Ja’iz bank Nigeria plc, the major Islamic bank in Nigeria. A convenient sampling technique was adopted to select the sample from the population (customers) of the Ja’iz bank plc. in Northern Nigeria. Hence self-administered questionnaire was chosen to gather the data. The data analysis was done using Statistical Package for Social Sciences (SPSS) version 23.0 and PLS-SEM 3. The results show that perceived quality of the products significantly influences customers satisfaction. It also indicates that there is a higher correlation between the cost of using the products and the level of customer satisfaction, that is to say, customers are very cost conscious as they would like to use the products at a lower cost than the current obtainable one. The customers also showed a higher level of convenience in using the Islamic banking products, and compliance score indicated that the customers are satisfied that Islamic bank in Nigeria is Shari’ah compliant. This result serves as a signal to service providers in knowing what type of the products customers enjoyed using, and which of the products needed improvement so as to provide customers with what they want most, in order for the banks to keep the existing customers intact and lure more potential customers, and to the policymakers, regulators and other relevant stakeholders to play their respective roles toward sustaining Islamic banking industry in Nigeria.

Forensic Accounting and Fraud Prevention and Detection in Nigerian Banking Industry Introduction

This study examined the role of the forensic accountant in the prevention and detection of fraud in the Nigeria banking sector. The study adopted the Survey research design while the source of data is the primary data and the data sourced was gleened from copies of the questionnaire administered to selected banks. Three (3) hypotheses were formulated and tested using Simple regression at a significant level of 5%, Independent T-test and Oneway Anova. Findings revealed a negative significant relationship between IFRS adoption and foreign direct investment of Nigeria banks. Findings also revealed that between forensic accounting has a significant impact on fraud prevention and detection. In addition, the findings of this study also revealed that there is a low level of the awareness of forensic accounting in the Nigeria banking industry. Consequently, the study recommended that Nigerian Government should provide the enabling environment for forensic accounting profession to thrive in the country by strengthening the legal, educational and political frame work in the country.

Fraud Detection in the Banking System in Nigeria: Challenges and Prospects

Fraud is an epidemic dimension that has eaten deep into the banking sector as well as the entire economics in Nigeria. Its devastating effect manifests itself in the deteriorating balance sheet of banks as well as in economic backwardness. Apparently, measures to detect and eradicate fraud in banking sector have been quite ineffective as the fraudulent practices have been on the increase in recent times. Thus, this study evaluates the various challenges of detecting and combating fraud in the banking sector in Nigeria. The results from the descriptive analysis showed that lack of adequate motivation is not a major cause of fraud in banks, looting of fund by bank managers and directors constitutes the major form of fraud in Nigeria. Furthermore, it is recommended that government should strengthened existing anti-graft agencies and to enhance their financial independence. Those managers and director involved in looting of fund should be persecuted to serve as a deterrent to potential fraudsters. In addition, bank staff should be properly screened to test their morality and integrity before recruitment. Adequate internal control mechanism should be established to serve as check and balances among the bank staff. There is also the need for the anti-graft agencies to be strengthened in order to adequately complement the effort of the Central Bank of Nigeria (CBN) at nibbling the incidence of bank fraud in the bud.Keywords: banking system, fraud, fraud detection, fraud prevention, Nigeria

Assignment of Contractual Rights: A Critical Appraisal of The AMCON Model for Securitization of Debts in the Banking Industry in Nigeria

Assignment of Contractual Rights: A Critical Appraisal of The AMCON Model for Securitization of Debts in the Banking Industry in Nigeria

Organizational Culture, Information Sharing and Perception of Records Management System as Factors Affecting Organizational Effectiveness in the Banking Industry in Nigeria

Organizational Culture, Information Sharing and Perception of Records Management System as Factors Affecting Organizational Effectiveness in the Banking Industry in Nigeria

The Application of Macroprudential Capital Requirements in Managing Systemic Risk

When setting banks regulatory capital requirement based on their contribution to the overall risk of the banking system we need to consider that the risk of the banking system as well as each banks risk contribution changes once bank equity capital gets redistributed. Therefore the present paper provides a theoretical framework to manage the systemic risk of the banking system in Nigeria based on macroprudential capital requirements, which requires banks to hold capital that is proportional to their contribution to systemic risk. Using a sample of 10 Nigerian banks, we reallocate capital in the system based on two scenarios; firstly in the situation where the system shocks do not exist in the system, we find that almost all banks appear to hold more capital; secondly, we also consider the situation where the system shocks exist in the system; we find that almost all banks tend to hold little capital on four risk allocation mechanisms. We further find that despite the heterogeneity in macroprudential capital requirements, all risk allocation mechanisms bring a substantial decrease in the systemic risk. The risk allocation mechanism based on ΔCoVaR decreases the average default probability the most. Our results suggest that financial stability can be substantially improved by implementing macroprudential regulations for the banking system.

Challenges Faced in Full Establishment of Islamic Banking System in Nigeria

Islamic banking in Nigeria is still at its infant stage and surrounded by a lot of challenges and set bank. It is important to note that despite the huge number of Muslims population in the country, little progress has been made in ensuring its full take off and operationalization. The paper there examines the challenges Islamic banking is faced with in Nigeria. Through review of past studies, the paper the paper identify factors like; Problem of Competition with dominant conventional banks, Problem of Competition with dominant conventional banks, Double taxation and others as the major challenges of Islamic banking in Nigeria. However the paper, the paper recommends that Islamic banking and finance in Nigeria offers a huge investment opportunity for both domestic and foreign investors what is most needed to achieve this, is for all stakeholders to collaborate in a way that a structured, functional and sustainable Islamic banking model will be formulated and communicated widely so as to gain general acceptability. Furthermore, the paper will serve as a guide to investors by pointing the problems the Islamic banking sector is facing in Nigeria.

Where Have Foreign Banks in Nigeria Gone? The Impact of Local Competitors on MNEs Strategic Choices and Outcomes

Privately owned Nigerian banks hold 94% of banking assets in Nigeria, the world's second largest share of local ownership, and the share had grown over time while it declined around the world. Theoretical explanations for the dominance of local firms related to liabilities of foreignness do not appear to apply to Nigeria banking industry; nor does the absence of pull factors that attract banks to Nigeria. To explain this puzzle we have adopted an exploratory study design, including extensive interviews with local and foreign banks in Nigeria and also examine Nigeria in regional and global perspectives. This exploration suggests that the entrepreneurial spirit of local banks, combined with nationalistic pride, have formed formidable barrier to the entry of foreign banks, deterring their entrance and undermining the market position of the few who entered. Nigeria government had played major role in this development, by instilling governance and ownership standards as well as by market structure and competition that have spurred the development of these capabilities. Such policy role signifies a distinct and unexplored means via which governments affect foreign entry and competitive dynamics after entry. We offer theoretical extensions to accommodate these features in the theory of the MNEs and outline implications for policy and firms. We highlight the merits of studying phenomena that are inconsistent with theories as an opportunity for theory extension and development.

Monitoring and Controlling of Islamic Banking System in Nigeria: Way Forward and Constraints

The study aims at examining the monitoring and control of Nigerian Islamic banking system. It also sheds light on the challenges, constraints and way forward for the development and growth of the system. The study employs qualitative approach making use of both the in-depth field interview with regulatory officers, practitioners, academicians who are directly involved in the operations of Islamic banking system in two countries Malaysia and Nigeria. And secondary source inform of documentary review is also employed. The study confirms ten challenges identified by the governor of the central bank of Nigeria (CBN). This study has policy implication to the CBN and other stakeholders in the area of Islamic banking system. Findings of this study will be a source of reference for Nigeria and other countries in formulating the similar concept of Islamic banking system because it provides gap which needs to be filled in order to make the system a success. However, this research also affects the policy implications to international organizations such as IDB, World Bank, UN and IMF that have been championing the course of financial inclusion. Keywords: Regulatory/supervisory, Islamic banking system, challenges and constraints, way forward, Nigeria and Malaysia.

Compensation Management And Employee Retention Of Selected Commercial Banks In Anambra State, Nigeria

This study was necessitated due to rate of employee turnover, which is increasing in Nigeria banking system; a situation whereby employee continuously move from one bank to another in a short period of time. This paper seeks to examine the influence of compensation management on employee retention. It specifically set out to examine the relationship between Salary and Employee satisfaction in selected Commercial banks in Awka. The study employed descriptive research design. Primary source of data was the major instrument used for this study. 60 copies of questionnaire were administered to employees of selected commercial banks (First bank, Fidelity and Sterling bank); 56 were retrieved and they were all useful. Pearson’s Product Moment Correlation was used for the analyses. The findings revealed that there is a positive weak relationship between salary and employee satisfaction. This shows that employees were not satisfied despite their seemingly attractive salary. In view of the finding, the study concluded that if management fail to formulate, administer and implement a good compensation policies that would allow them retain their talented employee; these employee might leave their job if they find a better offer elsewhere. The researcher recommended among others that compensation structure should include new and enticing ways to motivate and retain employee with wide range of benefits other than salary.

Training as Strategy for Effective Leadership Development in Business Organisations: Evidence from the Nigerian Banking Industry

<span>Training and Development (T&D) is one of the panaceas for developing sustainable leadership in both private and public enterprises. Such a disposition within the banking industry in Nigeria is akin to being pro-active for responsible managers in future. There is however some paucity of information on functional succession planning process in this sector of the economy which has to be documented. This study therefore examined the disposition of Training and Development (T&D) on the capacity for leadership enhancement in the banking industry of Nigeria. A descriptive survey research design was adopted. The population of study was 4,345 which were all employees in selected three commercial banks in Nigeria. A stratified random sampling technique was used while the sampling size was 165 employees. The findings revealed that there was a significant (P<0.05) relationship between coaching and Leadership Development (LD) with an r value of 0.74. A weak but significant relationship existed between Job Rotation (JR) and LD with an r value of 0.33 (P<0.05). There was a high and positive relationship between On-The-Job Training (OTJT) and LD. It was concluded that on-the-job training should be practiced as a deliberate policy in the Nigerian banking industry in order to enhance productivity and leadership development. The study recommended that deliberate efforts should be made to implement & practice Training & Development in the banking industry as it enhance productivity among employees as well as LD The study also recommended .that coaching as a variant of on-the –job training should be encouraged within the Nigerian banking industry as it addresses employees specific skill gaps required to enhance capacity building of future leaders within the industry.</span>