Nigerian Banking Sector Research Articles

Abnormal Audit Delay and Earnings Quality in Nigerian Banking

The objective of this study is to ascertain the relationship abnormal audit delay and earnings quality in the Nigeria. The study focused on the Nigerian banking sector. The Ordinary Least Square statistical technique was adopted. Eleven banks were selected using the simple random sampling technique. The period under review is eleven years from 2005-2015. The results showed that earnings quality has a negative relationship with abnormal audit delay. The study recommended that management should be prohibited from constant changing of accounting calculation that can cause material discrepancy between the auditor and client regarding accounting practices.Â

Fraud in Nigerian Banking Sector

The study examined fraud in the Nigerian banking sector. Ex-post facto research design was adopted for the study. Data for the period 2006-2015 were collected from Nigeria Deposit Insurance Corporation (NDIC) annual reports. Data relating to fraud, bank profit, bank assets and bank deposits were collected. Descriptive analysis and Ordinary Least Square (OLS) method of regression analysis were used for the data analysis. It was discovered that fraud has negative but insignificant relationship with bank profit amongst others. This implies that even though as bank fraud increases, bank profit increases, but the amount of fund involved in fraud does not significantly affect bank profit. We recommend amongst others that banks should include the amount involved in fraud in their financial statements and entrench good corporate governance (Fraud Box Model) as the key to lock the fraud -risk factors as contained in fraud diamond.

Developing technologically induced environments: the case of the Nigerian banking sector

This paper addresses issues regarding prevalent values and themes in technologically induced environments in terms of planning, development, and implementation. Emerging themes (efficiency, usability, control, and security) are debated and developed in relation to underpinning values (quality, education, and reach/concern) which provide a comprehension of technological adoption in the developing economy of Nigeria. In addition, problems relating to new product development, innovation processes, synthesising marketing technologies, and strategic planning are investigated and explored. Discussion on technological adoption and use produces diverse perspectives and interpretations, which consequently prompts questions on its nature and understanding in developing societies. Assessing life-world perspectives and interpretations through phenomenological hermeneutics and consumer and communication models this study examines levels of technologically induced customer services in the banking services sector from a Nigerian perspective.

Strategic Customer Relationship Management Practices: Employees’ Perception of its Influence on Competitive Advantage and Organizational Performance in the Nigerian Banking Sector

Strategic Customer Relationship Management Practices: Employees’ Perception of its Influence on Competitive Advantage and Organizational Performance in the Nigerian Banking Sector

Financial fraud and the effect of insider abuse in Nigerian banking sector

The fundamental objective of this study is to scrutinize the effect of insider abuse in the Nigerian banking sector along with its rudimental causes. The Classical Linear Regression Model (CLRM) was adopted along with secondary data extracted from the Nigeria deposit insurance corporations (NDIC) annual account report 2000-2016. The Ordinary Least Square technique signifies the prime technique of analysis as recommended by the ADF unit root test result. The ADF unit test revealed dataset stationarity at first order difference I(1). The R2 explains that 76.32% of the variation in the dependent variable is explained by the principal regressors. Total cases of fraud and amount involved were established to have a positive link with the total expected loss while, staff involvement, and total expected loss established negative and non-significant link. The study established that fraud in relation to insider abuse is not peculiarly Nigerian. The results bare that insider abuse are breed where there is weak and faulty internal control, lack of job security and reward for excellence. Recommendations are that financial institutions must review their internal control system, along with staff salary, the quality of staffs recruited and the audit system of the bank

Is There Any Difference of Financial Features between Bidder and Target Banks in Nigeria Mergers and Acquisitions?

The Nigerian Banking sector has suffered problematic times since 1999, when the sector was facing problems of corporate governance as identified by the Central Bank of Nigeria. However, CBN started embarking on a comprehensive reform agenda since that time and many measures have been taken to bring the sector on the right track by imposing an IMF Code of Good Practices on Transparency in Monetary and Financial policies. Mergers and Acquisitions (M & A) is a process “where two or more companies are combined to achieve certain strategic and business objectives”. Therefore, Merger and Acquisition seems as a means of achieving business and strategy objectives. The study examined the differences of financial features among bidder and target banks in the Nigerian commercial banking sector. The findings of paired t-test on financial features among bidder and target banks show that bidders and targets’ mean of each variable and financial features between bidder and target banks for 3 years (2002-2004) average indicates that bidders and targets’ mean of each variable are statistically different at 5%. Similarly, the findings for bidder banks’ performance of 5 years (2000-2004) before and 5 years (2006-2010) after mergers and bidder banks’ performance of 3 years (2002-2004) before and 3 years after mergers (2006-2008) are also statistically different at 5%. The study recommends that managers of large and efficient banks seeking to go for merger and acquisition should halt from targeting small and less efficient banks because it will lead to operational inefficiency.

Measuring Technical Efficiency and Productivity Change in the Nigerian Banking Sector: A Comparison of Non-Parametric and Parametric Techniques

Measuring Technical Efficiency and Productivity Change in the Nigerian Banking Sector: A Comparison of Non-Parametric and Parametric Techniques

E – Banking, Service Quality and Customer Satisfaction in Selected Nigerian Banks

Electronic banking is an important tool for all banks to survive in the competitive Nigerian Banking Industry. This study examines the relationship between the quality of service and customer satisfaction in the e-banking era. A sample of 398 respondents was selected, out of the total number of 66,895 customer population. Structured questionnaires and interview were used in collecting the data. Descriptive statistics was adopted in analyzing the data from the respondents. The results revealed that there is a significant relationship between quality of service and customer satisfaction. The paper concludes that E-banking has a positive impact on the quality of service in the Nigerian banking sector, but not on customer satisfaction. The study suggests that staff training and development should be enhanced in the banking industry in order to render quality and timely services to their customers.

Corporate Governance and Accounting Information Disclosure in the Nigerian Banking Sector

The study examine the effect of corporate governance on the quality of accounting information disclosed in Nigerian banks. The study covers banks that are quoted in the Nigeria Stock Exchange. Data were collected from secondary sources using the annual reports and factbook of selected banks during the period of 2006-2015. Data collected were analyzed using statistical tools; unit root, co-integration and error correction model. The corporate governance indices used in the study include; Audit committee meeting (ACM), Audit committee qualification (ACQ), Board size (BS), Directors in audit committee (DAC), Ownership structure (OS) and Corporate board members (CBM). The study revealed that ACM, ACQ, BS, DAC and OS had a significant positive relationship with accounting information disclosure at 1% and 5% level of significance respectively, while it was discovered that CBM had a negative relationship but was insignificant. It is concluded from the findings of the study that corporate governance contributes to the quality of accounting information disclosed in the banking sector.

Depositors Confidence and Mergers and Acquisitions: The Nigerian Banking Sector Experience

Depositors Confidence and Mergers and Acquisitions: The Nigerian Banking Sector Experience

A Comparative Analysis of the Asset Management Corporation of Nigeria and the Troubled Asset Relief Program of the United States

This article is a comparative analysis of the Asset Management Corporation of Nigeria (AMCON) with the Troubled Asset Relief Program (TARP), in the US. AMCON is an institution which was created to purchase non-performing loans of Nigerian banks due to their exposure to the oil and gas sector and the capital market. AMCON acquires these toxic loans of both distressed and sound banks, and then converts the loans to equities and sells them off. Banks that wish to sell their toxic loans to AMCON sustain losses since the average purchase price is 40% of the cost of the loan. Once AMCON purchases the toxic loans of banks, it issues seven-year Federal Government guarantee bonds to the banks. TARP, on the other hand, was established under the Emergency Economic Stabilization Act, 2008, to ameliorate the effects of the 2007 global financial crisis on the US economy. Its primary focus was on addressing the impact of the crisis on financial institutions as a result of their exposure to subprime mortgages. TARP later incorporated automobile companies into its program, as the failure of these companies, at the time, would have had a more significant impact to the US economy. The Secretary of the Treasury is responsible for the purchase of troubled assets, the management and sale of the assets and the remittance of the revenue from the sale to the US Treasury. TARP is encompassing and has the Financial Stability Oversight Board, the Congress, the Congressional Oversight Panel, the Comptroller General of the US, Judicial Review and Special Inspector General to help the Secretary in the performance of his duties. These checks and balances are lacking in AMCON; hence, the tendency of abuse of power is high under AMCON. While TARP has succeeded in stabilizing the US economy, AMCON is still struggling to stabilize the Nigerian banking sector. On further examination of these two institutions, this paper finds that there are a number of factors which hinder the realization of AMCON’s objectives. Primarily, this paper finds that there are no favourable government policies to complement AMCON. The absence of such policies, is challenging for the sustainability and regulation of the Nigerian banking system. This article concludes that similar to TARP, AMCON must be further developed and strengthened, and contain a more exhaustive system of checks and balances. In addition, it must incorporate more favourable government policies in order to be a success story.

Capitalization and bank performance: Evidence from Nigerian Banking Sector

AbstractThe study examines the impact of capitalization on bank performance of some selected commercial banks in Nigeria using econometric analysis on annual time series data of ten banks over the period of 2006 to 2014. The results from a Levin, Lin & Chu unit root test show that all the variables were non-stationary. The results from a Panel Least Square (PLS) estimate found that operating expenses, bank size and bank loan are negatively related to profitability but only bank loans are significant. On the other hand, bank deposit and bank liquidity are positively related to profitability but not significant. This conclusion has important policy implications for emerging countries like Nigeria as it suggests that capitalisation and total assets of a bank should be periodically evaluated. The regulatory authorities will therefore need to put in place appropriate machinery that will address issues of bank liquidity and assure asset quality in the industry.

Electronic Banking Services in Nigeria: Some Determinants and Opportunities for Households' Financial Inclusion

Economic transactions in many of the countries in Africa are still largely cash-based and many of these transactions are costly, inefficient, time consuming and sometimes risky because of the security situation in most countries in the continent. In fact, finality of payment is not always guaranteed because of potential counterfeits and the lack of financial discipline when cheques or other paper-based means of payment are used. The introduction of electronic banking services into the Nigerian banking sector has brought some respite considering the number of people now using electronic platforms such as the Automated Teller Machines (ATM), mobile phones, internet and bank websites instead of the conventional over the counter method used by most people. The result presented in here is based on secondary data consisting of 6002 respondents collected by The Financial Inclusion Insights Program, InterMedia. A descriptive analysis of data showed that the North-central (35%) and South-west (33%) geopolitical zones of the country had the highest as over one-third of the residents harnessed internet as the platform for their banking services. Meanwhile on the determinants of using electronic banking services, the result of the tobit model employed revealed age, gender, education status, and ownership of mobile phones as positive enablers and poverty status, distance to banking services and marital status as hiccups to using electronic banking services. The study therefore recommends welfare enhancement through provision of infrastructural facilities to ease access banking services, Also capacity building of respondents through education should be intensified since most of the people using these electronic platforms are those with a minimum of secondary education.

Electronic Banking Services in Nigeria: Some Determinants and Opportunities for Households’ Financial Inclusion

Economic transactions in many of the countries in Africa are still largely cash-based and many of these transactions are costly, inefficient, time consuming and sometimes risky because of the security situation in most countries in the continent. In fact, finality of payment is not always guaranteed because of potential counterfeits and the lack of financial discipline when cheques or other paper-based means of payment are used. The introduction of electronic banking services into the Nigerian banking sector has brought some respite considering the number of people now using electronic platforms such as the Automated Teller Machines (ATM), mobile phones, internet and bank websites instead of the conventional over the counter method used by most people. The result presented in here is based on secondary data consisting of 6002 respondents collected by The Financial Inclusion Insights Program, InterMedia. A descriptive analysis of data showed that the North-central (35%) and South-west (33%) geopolitical zones of the country had the highest as over one-third of the residents harnessed internet as the platform for their banking services. Meanwhile on the determinants of using electronic banking services, the result of the tobit model employed revealed age, gender, education status, and ownership of mobile phones as positive enablers and poverty status, distance to banking services and marital status as hiccups to using electronic banking services. The study therefore recommends welfare enhancement through provision of infrastructural facilities to ease access banking services, Also capacity building of respondents through education should be intensified since most of the people using these electronic platforms are those with a minimum of secondary education.

Information and Communication Technologies Management and Nigerian Banking Sector Liquidity

The study sought to explore the relationship between ICTs management and NBS liquidity. ICTs management helps the business to effect proper planning, coordinating, controlling and decision-making. Liquidity is important for banks to meet the demands of customers and a means of public confidence. The Internet connectivity in the NBS discouraged incentives for manipulations and other inefficiencies that characterized the paper and pen banking of the pre-reform era. The e-FASS approach and heavy investments and application of quality ICTs management by banks restored national and international confidence in the NBS which in a great measure, helped to lure back capital and liquidity into the system. Previous studies have found positive relationship between ICTs management and business productivity, bank profitability and economic growth. Through theoretical and empirical results this study found a high positive relationship between ICTs management and NBS liquidity.

Effective Whistle-blowing Mechanism and Audit Committee in Nigerian Banking Sector

A good done to others and clandestine acts revealed are investments that will surely ripen at the fullness of time. Whistle-blowing occupies vital role in combating fraud and corruption practices and other illegal activities in an entity. This study examines effective whistle-blowing mechanism and audit committee in Nigerian banking sector. The study employed a multi-variate regression technique as tool of analysis. A logistic regression analysis is used to estimate the relationships proposed in hypotheses. The study predicts that the Nigerian banking sector with more independent, meeting, expert, and diligent audit committees are likely to establish effective whistle blowing mechanism. The study finds a strong association between effective whistle blowing mechanism in Nigerian banking sector and audit committee independence, audit committee financial expertise, and audit committee meeting. The result of findings reveals that whistle blowing mechanism in Nigerian banking sector needs to be strengthened. Finally, the audit committee should be given the oversight duties in order to achieve desirable goals and objectives.

Enterprise Risk Management and firm performance: an integrated model for the banking sector

This study investigates how the implementation of Enterprise Risk Management program affects the performance of firms using an Enterprise Risk Management model for the banking sector and an integrated model for measuring Enterprise Risk Management index used in the study by Mukhtar and Soliman (2016). Ten listed commercial banks were selected with the Enterprise Risk Management index as the main independent variable, with Return on Average Equity (ROAE), Share Price Return (SPR) and Firm Value (FV) used as three separate dependent variables. The study provides strong evidence of a positive relationship between Enterprise Risk Management implementation and performance in the Nigerian banking sector. The findings and conclusions of this study are consistent with those of other studies that used data from different industries, providing a basis from which to generalize the findings from this study to firms in other industries.

Empirical assessment of frauds on banks’ liquidity: evidence from Nigeria

The study examined the effects of frauds on the liquidity position of banks in the Nigerian banking sector using time series data for the period 1994 to 2015. The study used unit root test to determine the stationary state of the variables. It also employed the Johansson co-integration and error correction model (ECM) statistical techniques to establish both short-run and long-run dynamic relationships between the endogenous and exogenous variables. The findings revealed that total number of fraud cases, actual amount involved in the fraud and the loss associated with it negatively affect banks liquidity position in the long- run, though the effect is not as strong as in the short run. The paper concluded that fraud is a key variable that depletes the banks’ ability to meet up with short term obligation as well as impinge on the ability to effectively maximize the wealth of the shareholders. The study therefore suggested that the services of the forensic accountants should be given utmost priority by banks and all concerned stakeholders so as to constantly and effectively monitor the internal control system, report levels of frauds, as well as come up with a model to fight the effect of frauds on banks’ operation. The CBN and other law enforcement agencies should come up with stiffer penalties for any perpetrator of frauds of any nature and categories in the banking sector. This will help to create sanity and serve as deterrent to the other would be perpetrators of frauds. Another peculiar aspect that should be empirically examined is banks’ staff involvement in frauds and forgeries and how they impact on the banking sector operations and liquidity position.Keywords: Liquidity, number of fraud cases, actual loss, amount involved in fraud cases

Effect of Performance Management System on Employees' Attitude in Nigerian Banking Sector

Performance Management focuses on the organizational and employees’ performances and the system that are usually employed for carrying out the process of evaluation. Performance Management System (PMS) is said to have been developed and implemented resulting in the failure to deliver the results people expect from it. This is one of the biggest challenges facing line managers and human resource unit of most establishments and it usually escalates to different approaches from employee’s perspectives. The main objective of the paper is to examine the effect of Performance Management System (PMS) on Employees’ Attitude in the Nigerian Banking Sector. The study used Stratified Sampling Technique to select a total number of one hundred and eighty (180) staff from Head Offices of the fifteen (15) listed Banks in Nigerian Stock Exchange (NSE). Primary data were collected using a structured questionnaire. Data obtained were analyzed and presented using both descriptive and inferential statistics. Correlation and regression analysis were used to test the hypotheses formulated for the study. The findings revealed that R2 of 0.2177, 0.4066 and 0.6687 values suggested that variables in the model are all jointly significantly influence the probability of the Nigerian banking sector performing better. The study concluded that the implementation of PMS is said to be the commencement of changed attitude to work due to continuous and systematic assessment of employees’ performance on a regular basis. Noting that PMS in the Nigerian Banking Sector would obtain better results if they can further improve some segments of PMS such as objective performance, monitoring and evaluation. The study recommended that; management should continue to communicate the importance of Performance Management System (PMS) to employees until the process is entrenched and also the outcomes should be channeled to employee developmental and promotional purposes.

The Relevant Factors of Employee Efficiency as a Multidimensional Constructs in Nigerian Banking Sector after Consolidation

After consolidation employee productivity was negatively affected by stress, anxiety and fear of losing job. The outcome however, according to Kivuti (2013) among others include; banks are witnessing unnecessary expenses and operating at marginal profit level and at the same time employees found it difficult to meet targets. Using triangulation method the study found that employee efficiency is multi dimensional constructs in Nigerian banking sector. The five factors in descending order are Job Knowledge (14.30%), Job Adaptability (13.96%), and Dependability (13.83%); Interpersonal relations (13.83%) and Compliance (11.73%) indicating that there is more Job Knowledge than other factors in employee efficiency in the banking sector in Nigeria. In total the five factors accounted for 67.06% of the variance in employee efficiency. At 95% confidence level sig. value is statistically significant (.00).The findings of the study lend support to Ha. The study recommended that banks should emphasize on induction courses, training and development and brain storming session for more job knowledge to increase employee efficiency.