Nigeria Deposit Insurance Corporation Research Articles

Effect of Ownership Concentration on Agency Cost of Industrial Firms Listed on the Nigerian Exchange Group

This study investigated the effect ownership concentration on agency cost of industrial firms listed on the Nigerian exchange group. The specific objectives were to examine the effect of government ownership, managerial ownership, institutional ownership and foreign ownership affects agency cost of firms listed on the Nigerian exchange group. Panel Least Squared (PLS) method of data analysis was used. Secondary sources of data were employed; the interested variables were sourced from the annual report of the quoted industrial firms. The variables were assets utilization as the dependent variables while government ownership, managerial ownership, institutional ownership and block ownership were the independent variable. The study employs descriptive statistics, correlation and regression analysis in the analysis. From the analysis result the study found that. Government ownership has no significant impact on agency cost of firms listed on the Nigerian exchange group (t-test 1.539283, p=0.1286). Managerial ownership has significant impact on agency cost of firms listed on the Nigerian exchange group (t-test 4.541870, p=0.0000). Institutional ownership has significant impact on agency cost of firms listed on the Nigerian exchange group (t-test -3.443344, p=0.0005). Foreign ownership has negative and insignificant effect on agency cost of firms listed on the Nigeria exchange group (t-test -0.336863, P= 0.7372). The researcher recommends that. Government ownership of sensitive firms should be minimized, as such ownership are usually inefficient and characterized by bureaucratic bottlenecks, which do not have clear incentives to improve asset. The study recommends that financial regulatory bodies in Nigeria such as the Central Bank of Nigeria (CBN), Nigeria Deposit Insurance Corporation (NDIC), and Securities and Exchange Commission (SEC) should ensure that a reasonable degree of managerial ownership is maintained by all banks due to its potential ben

Innovation Diffusion and Sustainable Development of Deposit Money Banks in South-South Nigeria: The Moderating Role of Entrepreneurial Marketing

Many deposit money banks in Nigeria are utilizing new technologies to innovate their products and services. But amidst these wins are some legitimate concerns about the credibility of the banks, customer trust, banks’ technical competence, capability to adopt innovations and the ability to sustain development. Framed by the diffusion of innovation (DOI) theory, this study explored the relationship between innovation diffusion and sustainable development of deposit money banks in Nigeria and the moderating role of entrepreneurial marketing. A quantitative and cross-sectional survey research design was adopted to consider three (3) hypotheses formulated for the study. Based on a population size of twenty-two (22) deposit money banks in south-south Nigeria, (Nigeria Deposit Insurance Corporation (NDIC), 2022), two (2) respondents; branch managers and marketing managers were drawn randomly from each of the banks for the survey. Therefore, forty-four (44) copies of questionnaire representing the total respondents were suitably designed and administered to obtain primary data. The face validity of the questionnaire was determined by experts comprising of researchers and business practitioners with satisfactory knowledge of the subject matter. The construct and content validity were established from earlier researchers who used it, but with few adjustments. The Cronbach's Alpha Coefficient reliability measure was also applied to determine the internal consistency of items in the questionnaire using Statistical Package for Social Sciences (SPSS). The Pearson moment correlation coefficient was used to determine the degree of relationship between the dimensions of innovation diffusion (product innovation diffusion and process innovation diffusion) and sustainable development. Partial correlation was used to examine moderation of entrepreneurial marketing on the relationship between innovation diffusion and sustainable development. Findings reveal that inn

FINANCIAL PRODUCTS MARKETING AND ITS IMPLICATIONS ON THE PERFORMANCE OF DEPOSIT MONEY BANKS IN NIGERIA

The study examined the effect of financial products marketing on the Performance of deposit money banks (DMBs) in Nigeria, for the duration of 2008-2022 which is 20years. The secondary data (time series) was gotten from Central Bank of Nigeria (CBN) Statistical Bulletin and Nigeria Deposit Insurance Corporation (NDIC) for the duration under review. The study identified the following measures financial products such as Automated Teller Machine (ATM), Point of Sale (POS), INTB (INTB) and NIBSS Electronic Funds Transfer (NEFT) which was analyzed in relation to the Return on Assets (ROA) (proxy with performance of DMBs in Nigeria). The DP for the preliminary description of the data set, correlation analysis will be use to ascertain the co-movement of the independent variables in relation to the dependent variable while the Multiple Regression analysis were employed with the aid of E-VIEW version 9.0 for the purpose of testing the research hypothesis. The study found that ATM, POS, and INTB significantly affect DMB ROA in Nigeria, while NEFT did not. Finally, financial product marketing has a substantial impact on DMB performance in Nigeria. If DMB management wants to boost ROA, they could focus on ATM service improvements, which will boost customer happiness and patronage.
 Keywords: Financial Products, Marketing, Internet, Point of Sales and Performance.

TECHNOLOGICAL DISRUPTION AND DEPOSIT MONEY BANKS FINANCIAL PERFORMANCE IN THE PRE AND POST COVID-19 PANDEMIC IN NIGERIA

The study examined the relationship between technological disruption and deposit money banks financial performance in the pre and post covid-19 pandemic in Nigeria for the period of 2000-2020 (21years). This was done respect of measures of technological disruption, namely; Automated Teller Machine (ATM), Internet Banking (INTB), Point of Sales (POS) and Mobile Transactions (MTs) and how they affects deposit money banks financial performance of in Nigeria {proxy with Return on Assets (ROA)}. The method of data collection used in this study is the secondary source of data (time series data), from the CBN Bank Supervisory Annual Report, CBN Statistical Bulletin and Nigeria Deposit Insurance Corporation (NDIC) Annual Reports for the period 2000-2020. The data set was described using descriptive statistics and the unit root test was conducted to ascertain if the data are stationary in order to have accurate regression result. The correlation analysis will be use to ascertain the co-movement of the independent variables in relation to the dependent variable while the Multiple Regression analysis were employed with the aid of E-VIEW version 9.0 for the purpose of testing the research hypotheses raised. The finding revealed that Automated Teller Machine (ATM), Internet Banking (INTB), Point of Sales (POS) and Mobile Transactions (MTs) have positive and significant effect on Return on Assets (ROA) of deposit money banks in Nigeria. Hence, the study concluded that technological disruption has significant positive effects on deposit money banks financial performance in the pre and post covid-19 pandemic in Nigeria. Based on the findings, the study recommended that deposit money bank management should pay more attention on the activities that will improve the technological disruption channels of their banks if they wish to increase the ROA value of their banks as this will lead to high customer’s satisfaction and patronage.
 Keywords: Technological Disruption, Financial Performance, Deposit Money Banks and Pre and Post COVID-19 Pandemic.

COVID-19 PANDEMIC: FINANCIAL DISRUPTIVE INNOVATIONS AND PERFORMANCE OF DEPOSIT MONEY BANKS IN NIGERIA

The study examined the relationship between covid-19 pandemic: financial disruptive innovations and performance of deposit money banks (DMB’s) in Nigeria for the duration of 2000-2020 (21years). This was done respect of measures of financial disruptive innovations, namely; Automated Teller Machine (ATM), Point of Sale (POS), Internet Banking (INTB) and Mobile Banking (MB) and how the effects performance of deposit money banks in Nigeria {proxy with Return on Equity (ROE)}. The method of data collection used in this study is the secondary source of data (time series data), from the CBN Bank Supervisory Annual Report, CBN Statistical Bulletin and Nigeria Deposit Insurance Corporation (NDIC) Annual Reports for the period 2000-2020. The data set was described using descriptive statistics and the unit root test was conducted to ascertain if the data are stationary in order to have accurate regression result. The correlation analysis will be use to ascertain the co-movement of the independent variables in relation to the dependent variable while the Multiple Regression analysis were employed with the aid of E-VIEW version 9.0 for the purpose of testing the research hypotheses raised. The finding revealed that ATM and POS has positive significant effect on ROE of DMB’s in Nigeria while INTB and MB has negative insignificant effect on ROE of DMB’s in Nigeria. Hence, the study concluded that the relationship between financial disruptive innovations and performance of deposit money banks in Nigeria significant, and it’s affected the banking industry positively. It is therefore recommended that, Investment in technological disruptions has been proven to enhance the finance of Nigerian commercial banks. The banks should therefore give emphasis to efficient utilization of the financial disruptive innovations enabled services such as POS, MB, ATM and INTB.
 Keywords: Covid-19 pandemic, Financial Disruptive Innovations, performance and Deposit Money Banks.

Frauds and forgeries in banking industry in Africa: a content analyses of Nigeria Deposit Insurance Corporation annual crime report

Frauds and forgeries in banking industry in Africa: a content analyses of Nigeria Deposit Insurance Corporation annual crime report

Deposit insurance and credit risk of Nigeria banking system: a time series analysis

This study examined the relationship between deposit insurance and nonperforming loans ratio of Nigeria banking system. Time series data were sourced from the publications of Nigeria deposit Insurance Corporation, Central Bank of Nigeria, and Stock Exchange Factsheet. Nonperforming loan ratio was measure for dependent variable while deposit in insurance was proxied by insured deposits and risk based premium. Ordinary Least Square (OLS), Augmented Dickey Fuller Test, Johansen Co-integration test, normalized Co-integrating equations, parsimonious vector error correction model and pair-wise causality tests were used to conduct the investigations and analysis. The study found that 63.5 percent of variation in the level of nonperforming loan ratio is explained by variations in insured deposits and risk-based premium. Insured deposits and risk-based premium have a negative relationship with the level of bank distress. From the findings, we conclude that Nigeria deposit insurance has a moderate relationship with commercial banks stability. From the findings, we recommend that role of deposit insurance in eliminating costly bank runs should be is widely recognized. Nigeria Deposit Insurance Corporation should adopt the more sophisticated differential premium assessment system (DPAS) where risk is explicitly considered in assessing premium payable by insured institutions, and Nigeria Deposit Insurance Corporation should protect bank deposits in Nigeria and improve to a large extent insured deposit of the deposit money banks deposit in the short run and long run to avert the cases of bank failure.

Impact of Security Challenges on Bank Performance in Nigeria

Economic stability is sustainable in a friendly and secure environment where lives and properties are guaranteed. Banks as providers of loans and advances to the productive sectors of the economy require a conducive, non- hostile economic and business environment for optimisation and maximisation of corporate objectives even so as the banking industry is a highly sensitive subsector. However, the challenge of insecurity across the country has posed a tremendous danger to the operations and business models of the banking institutions. This paper examines the impact of security challenges on the performance of banks in Nigeria, as business environment plays a significant role in the sustainability, profitability and growth of banking business globally. Bank performance is dependent on the level of security in the operating environment. The study evaluates the relationship between insecurity and bank performance. Federal Government security expenditures is taken as a proxy for security challenges and regressed with metrics of bank performance such as total assets, loans and advances, liquidity ratio and loans to deposit ratio by using partial least squares structural equation modelling (PLS- SEM). The study covers a period from 2000 to 2020 and the data were obtained the Central Bank of Nigeria Statistical Bulletin, National Bureau of Statistics, Nigeria Deposit Insurance Corporation and the Federal Budget office. The result reveals that insecurity has adverse impact on bank performance like other social and economic activities. The issue of insecurity demands holistic solution for the sustainability and growth of the banking industry and the economy as a whole.

Effects of Digital Banking on The Performance of Commercial Banks in Nigeria 2010 -2019

In this study, the effect of digital banking on the performance of Commercial Banks was examined from 2010 to 2019. The study applied the Autoregressive Distributive Lag (ARDL) framework to examine the relationship between point of sales machine (POSG), Banking Transactions made through unstructured supplementary service data (USSDG), Web banking (WEBG) and Return on Assets (ROA) of commercial banks in Nigeria. The data were obtained from the statistical bulletins of the Central Bank of Nigeria (CBN) and annual reports of Nigeria Deposit Insurance Corporation (NDIC). The result of the analysis revealed that digital banking has positive and insignificant effect on the performance of commercial banks in Nigeria. . In the light of this findings, the study recommends the need for relatively stable network: In other to reduce number of failed transactions, banks are hereby encouraged to liaise with network providers and their engineers to develop a standardized network platform exclusively for each of the digital banking channels. Also there is need for digital banking education to bank customers on the benefits of digital banking. Equally there is need for all banks to have 24 hours working cyber security department in order to ensure that the channels are not hijacked by cyber criminals.

Electronic fraud: an emerging cause of bank failure in Nigerian deposit money banks

PurposeThis study aims to review the degree to which fraud and other unethical practices especially in the digital space have affected the Nigerian banking industry both in the past and present, and how it will be a growing concern in the imminent future. The objective of the study was to examine the impact of electronic fraud on the quality of assets and return on assets of Nigerian deposit money banks.Design/methodology/approachThe research used secondary data for the periods 2006 till 2018, which were collected from the Nigeria Deposit Insurance Corporation annual reports. Descriptive analysis and the ordinary least square method of regression analysis were used for data analysis.FindingsFindings revealed that electronic fraud cases increased progressively over most of the years of study, which can be attributed to the increased bank products that are electronic-based.Originality/valueMany of the reviewed literature examined electronic fraud and its impact on bank profitability but this study examined the cause of electronic fraud and what can be done to curtail it.

Nature of frauds in Nigeria’s banking ecosystem, 2015-2019

PurposeThis paper aims to examine the nature of frauds and insider involvement in the perpetration of frauds in Nigeria’s banking ecosystem. It probes the payment platforms mostly vulnerable to fraud attacks since the role-out of cashless policy in Nigeria in 2014.Design/methodology/approachUsing secondary data on frauds and forgeries in Nigeria Deposit Insurance Corporation annual report of 2019, the study engaged the data on frauds and forgeries to unpack the complex dynamics in relation to bank frauds in Nigeria.FindingsFindings show that fraud attacks on deposit money banks increased year in year out although the actual monetary loss dropped in 2019 as against 2018. Technology mediated transactions such as the use of automated teller machine and internet-based transactions experienced the most fraud. In relation to the role of insiders, all cadres of staff were involved in the fraud but majority of those involved were temporary staff.Practical implicationsArising from this, it is suggested that banks should continue to strengthen security system and governance structures. Employing temporary staff should be phased out while online and offline vigilance should be mounted.Originality/valueThe study contributes to knowledge by examining the nature of frauds and unveiling the insider dimensions of fraud and the possible factors increasing the vulnerability of casual staff to perpetrate fraud.

Accelerating Financial Inclusion for Sustainable Development in Nigeria

Financial exclusion constitutes a major sustainable development challenge in many developing countries such as Nigeria. This paper examines the financial inclusion efforts in Nigeria, the implications of strong financial inclusion for sustainable development, and the challenges militating against financial inclusion in Nigeria. The paper also discusses the roles of rural banking scheme, Nigeria Deposit Insurance Corporation, and various types of banks as well as the non-interest banking policy and alternative banking channels in financial inclusion. The paper suggests that a strong financial inclusion of the hitherto inadvertently financially excluded and the poor segments of the society would increase economic activities, employment, consumption, government expenditure as well as economic growth and sustainable development. It also identifies the challenges militating financial inclusion in Nigeria to include; low financial literacy, cumbersome banking documentation and minimum operating balance requirements, inadequate and uneven distribution of bank branches and alternative banking channels, low uptime and malfunctioning of e-channels, growing poverty incidence, and high unemployment rate, among others. The paper recommends the re-introduction of rural banking scheme, public enlightenment, minimization of banking documentation and minimum operating balance, increased deployment of alternative banking channels, and stiffer penalty against corruption, among others. A strict implementation of the suggested recommendations would accelerate financial inclusion and ensure sustainable development in Nigeria. Keywords: Financial inclusion, Financial exclusion, Sustainable Development, Nigeria DOI: 10.7176/RJFA/12-16-05 Publication date: August 31 st 2021

Electronic Banking and Growth of Deposit Money Banks Operations: Nigeria Experience

The study examined the Nigeria experience of the influence of electronic banking on the growth of deposit money banks in Nigeria. The research design used for the study was the expost-facto research design. The data used in this study were obtained from the annual reports and statements of accounts of Nigeria deposit insurance corporation. CBN annual report and account, CBN statistical bulletin; various online journals and literature. In order to achieve the objective of this study, a linear regression was adopted on both functional and statistical models. The study found that internet banking has a negative impact on growth rate of total deposit of deposit money banks in Nigeria with a regression coefficient of -10.09143. Automated Teller Machine (ATM) operation has a positive impact on asset growth of deposit money banks in Nigeria with a regression coefficient 37.13510 and Point of Sale (POS) transaction has a positive impact on asset growth of deposit money banks in Nigeria with a regression coefficient 1.334829. The study therefore recommends among others that due to the insignificant relationship that exists between internet banking and deposit growth banks that are yet to fully adopt internet banking should do so as a matter of urgency if they must grow, remain relevant, competitive and profitable. Banks that seek to improve their deposit growth performance and offer numerous products / services in an effective, efficient and cost effective manner. There should be increased awareness creation about the use of smart cards for banking operations and banks should also improve the number of services that ATM can offer the banking public. The Central Bank of Nigeria should ensure that guidelines with respect to POS transactions are properly adhered to.

Roles of the CBN and NDIC in Nigeria's Monetary Policy and Regulation

The stability of financial institutions in coordinating and navigating the affairs of a nation’s economy is considered as a bedrock of economic development for any nation. The need to create an efficient financial system anchored on financial stability and effectiveness has become more imperative overtime in order to ensure economic growth. There is also the imminent need for financial institutions (Traditional and non-traditional financial institutions) to acclimatize to the trends of financial digitalization across the globe. The Central Bank of Nigeria (CBN) and the NDIC (Nigeria Deposit Insurance Corporation) are two financial bodies ladened with the responsibility of overseeing and managing the system of banking in Nigeria. This paper seeks to examine the roles of these two financial bodies in Nigeria in ensuring financial stability in the country’s economy.

Capital Adequacy Regulation and Financial Distress Resolution in the Nigerian Banking Industry: An ARDL Approach

This paper investigates the impact of capital adequacy regulation on financial distress resolution in the Nigerian banking industry within the ARDL framework using aggregate time series data. Financial distress resolution is measured by ratio of distressed banks, while capital adequacy regulation is measured by credit to risk weighted assets ratio, capital to total assets ratio and assets to capital ratio. The sample comprises annual time series data covering the period from 1986 to 2018, while the data are obtained from three reliable sources: namely, Central Bank of Nigeria (CBN) statistical bulletin, Nigeria Deposit Insurance Corporation (NDIC) quarterly and Nigeria Stock Exchange (NSE) fact sheet. The plausible ARDL specification is determined using the Schwarz information criterion, which selects a model with two lagged values of ratio of distressed banks as additional explanatory variables. We find that financial distress resolution exhibits persistence behavior and depends on its two lagged values, but with a positive and sizable net own effect. However, the relationship between financial distressed resolution and capital adequacy regulation measures has no lagged effect. Also, both the individual and joint impacts of the three capital adequacy regulation ratios are not statistically significant. Based on these findings, we conclude that capital adequacy regulation is not an important determinant of financial distress resolution in Nigeria, and that the regime of risk-based capital regulation may produce further moral hazards behavior in the Nigerian banking sector.

Liquidity Management, Basel Capital Adequacy and Financial Distress Resolution in the Nigerian Banking Industry

The purpose of this study is to analyze the effect of liquidity management and BASEL capital adequacy on financial distress resolution in Nigeria. The study adopts a unidirectional causal research design within the single-equation dynamic autoregressive distributive lag (ARDL) framework. The empirical analysis is based on annual time series data covering the period from 1986 to 2018 obtained from different Central Bank of Nigeria (CBN) statistical bulletin and Nigeria Deposit Insurance Corporation (NDIC) quarterly as well as the factsheet of the Nigerian Stock Exchange (NSE). The stationarity test results indicate that the study variables are integrated at different levels, with most of them being I(1) series. The ARDL results show that micro-prudential liquidity management has no significant effect on ratio of distressed banks, while the effect of macro-prudential liquidity management on ratio of distressed banks is significant. The results also show that capital adequacy regulation has no significant effect on both ratio of distressed banks and governance/compliance breaches of distressed banks, while it has a significant effect on business risks exposure of the distressed banks and asset quality of distressed banks. Further, monetary policy measures have no significant effect on the level of distress in the Nigerian banking industry. Based on these findings, we conclude that in Nigeria, prudential measures aimed at achieving macro-level financial sector stability have significant policy implications for financial distress resolution. Also, while traditional monetary policy measures are not effective tools for achieving financial sector stability, the effect of capital adequacy regulation on financial distress resolution depends on how the former is measured. The main contribution of this study is the use of Newey-West robust framework, which consistently estimated the effect of liquidity management and BASEL capital adequacy on financial distress resolution even when both heteroskedasticity and autocorrelation are present in the data.

Knowledge capability and fraud risk assessment in Nigeria deposit money banks: The mediating effect of problem representation

Nigeria Deposit Insurance Corporation (NDIC) annual reports (2014–2017) suggest that the country’s deposit money banks (DMBs) have been exposed to escalating incidence of fraud and forgeries. This ...

Technology innovation in the Nigerian banking system: prospects and challenges

PurposeThe banking system in Nigeria is gradually moving away from transactions “across the counter” to the fingertips of the customers with the adoption of modern technology. However, every development comes with its “pros and cons” because as technology innovation has improved service delivery and profitability of banks in Nigeria, crimes are also at a high side. To activating the minds of bank operators about the importance of technology adoption and its shortcomings, this paper aims to examine the prospects and challenges of technology innovation in the Nigerian banking system.Design/methodology/approachSecondary data were retrieved from the annual reports of Central Bank of Nigeria (CBN) and Nigeria Deposit Insurance Corporation (NDIC) from 2013 to 2017 to know the interaction between e-banking platforms and performance of banks in Nigeria. The study administered a questionnaire to the bank customers in Lagos Island, Nigeria to understand their perception towards e-banking. This study is anchored on prospect theory to ascertain the risk orientation of the Nigerian banks regarding how they adopt technology and reasoned action theory to understand the intention of bank customers in using the opportunities of e-banking copiously.FindingsThe findings of this study reveal the migration from cheques to electronic related transactions. It further indicates a high rate of fraud committed through those channels. The analysis of primary data shows that innovation adoption, service quality, cybercrime have significant relationship with the competitiveness of banks, the intention of bank customers, and perception of customers towards online services. However, the rate of frauds does not have significant relationship with the usage of mobile banking products which further studies can critically examine.Originality/valueThis study has revealed available huge potentials in the e-banking that are yet to be used in Nigeria. However, consumer orientation needs to be worked on, because, customers still have the fear that cybercrime is mostly committed via e-banking platforms. Unlike in developed countries whereby quite good numbers of customers make use of e-banking platforms, majority of bank customers in Nigeria still prefer using manual methods and the world is already on the verge of moving into 5 G from 4 G.

An Evaluation of Fraud and Deposit Money Banks’ Profitability in Nigeria: (2009-2018)

This work evaluates Fraud and Profitability of Deposit Money Banks (DMB’s) in Nigeria for ten years (2009-2018); with the specific objective of assessing whether the rate at which fraud occurs, the number of persons involved in fraud, the amount targeted in fraud and the loss that the banks incurred to fraud has significant impact on Profitability for the period. Using Regression Analysis on historical data from Nigeria Deposit Insurance Corporation (NDIC) Reports, we found out that there exists a strong positive correlation between DMB’s Fraud and Profitability at more than 90%; and judging by our data analytics at 5% level of significance, the frequency of fraud, fraud amount and monies that could not be recovered from fraud proved to assert strong influence on the profitability of DMB’s in Nigeria with only Fraud Involvement proving insignificant. To mitigate fraud, we recommend that banks create fraud policies that are robust enough to prevent fraud perpetrators from committing fraud and a Whistleblowing System (WBS) that guarantees protection for a Whistle Blower.

Effect of Diversity Management Strategies on Employee Retention among Staff of Nigeria Deposit Insurance Corporation

Effect of Diversity Management Strategies on Employee Retention among Staff of Nigeria Deposit Insurance Corporation