Nigerian Financial Institutions Research Articles

Nexus between Returns on Equity and Disclosures of Greenhouse Gas Emissions, Waste Management, and Renewable Energy

Environmental sustainability is now being continuously researched in almost all areas of humankind. This study investigated the impact of environmental sustainability disclosures (proxy by renewable energy disclosures, Greenhouse Gas Emissions disclosures, and waste management disclosures) on the returns on equity of sampled Quoted Nigerian Financial Institutions. Purposely, Fourteen Quoted Nigerian Financial Institutions on the Nigerian Exchange Group were taken as the sample size for this study. The study spanned a period of 9 years from 2013 to 2021. The analysis was carried out using panel data and employing multiple regression models to assess the relationships between the variables using secondary data collated from the annual reports of Quoted Nigerian Financial Institutions. The findings of the study reveal that the impact of renewable energy disclosures (with coefficient estimate = -0.19295, t-value = -1.41 and p-value = 0.16), Greenhouse Gas Emissions disclosures (with coefficient estimate = -0.16105 & the t-value = -1.18 p-value = 0.239, and waste management disclosures (with coefficient estimate = 0.124013, the t-value of 1 and p-value = 0.317) on returns on equity is not significant. This study concluded that the relationship between return on equity and environmental sustainability variables disclosures (proxy by Renewable Energy Disclosure and Greenhouse Gas Emissions) is unrelated.

The dilemma of employee productivity measures and managerialism practices: an empirical exploration in financial institutions

PurposeThis empirical study aims to explore how actors in specific human resource practices (HRPs) such as line managers (LMs) impact employee productivity measures in the context of financial institutions (FI) banks.Design/methodology/approachThis cross-country study adopted a qualitative methodology. It employed semi-structured interviews to collect data from purposefully selected 12 business facing directors (BFDs) working in the top 10 banks in Nigeria and the UK. The data collected were analysed with the help of the trans-positional cognition approach (TPCA) phenomenological method.FindingsThe findings of a TPCA analytical process imply that in the UK and Nigeria’s FIs, the BFDs line managers’ human resources practices (LMHRPs) resulted in a highly regulated workplace, knowledge gap, service operations challenges and subjective quantitatively driven key performance indicators, considered service productivity paradoxical elements. Although the practices in the UK and Nigerian FIs had similar labels, their aggregates were underpinned by different contextual issues.Practical implicationsTo support LMs in better understanding and managing FIs BFDs productivity measures and outcomes, we propose the Managerial Employee Productivity Operational Definition framework as part of their toolkit. This study will be helpful for banking sectors, their regulators, policymakers, other FIs’ industry stakeholders and future researchers in the field.Originality/valueWithin the context of the UK and Nigeria’s FIs, this study is the first attempt to understand how LMHRPs impact BFDs productivity in this manner. It confirms that LMHRPs result in service productivity paradoxical elements with perceived or lost productivity implications.

Task identity of outsourced versus core employees in Nigerian financial institutions: exploring the role of employment status

The work environment in Nigerian financial institutions reflects the polarization and segregation of employees into different employment statuses. However, the implications of this on employee task identity are rarely discussed. This study, therefore, examined the difference in the task identity between the outsourced and core employees in Nigerian financial institutions. A cross-sectional survey research design was employed. A total of 359 employees were selected from six commercial banks in Southeast Nigeria using a multistage sampling method. Data was collected using a structured questionnaire. Pearson’s chi-square test was used to analyze data at the bi-variate level, while logistic regression analysis was used at the multi-variate level, all at p<0.05. Outsourced employees experienced a lower level of task identity than core employees. Employment status (OR =5.501, 95% CI 3.051-9.919) and education (OR=2.896, 95% CI 1.329-6.313) were significantly associated with task identity. Banks should design enriched jobs that will enable the completion of entire job functions for all employees without discrimination or favor to any groups or persons, as this will help employees to identify with their tasks when completed and feel pride and important, as well as enhance employee motivation, satisfaction, and commitment.

Boosting employee morale through effective personnel management of selected banking and insurance firms in Nigeria

The ISA 2007 should also be changed to include notice of trade unions or their representatives in the case of large mergers, just as in the case of intermediate mergers, since legislation is a continuous process. This will help to preserve the goodwill of interested workers, who are the backbone of any organization during a merger or personnel management process. Regulatory bodies must guarantee that enough shareholders are kept informed and unsurprised throughout the merger and personnel management proceedings to avoid these business dealings becoming monopolistic. Based on this discovery, the research concluded that most Nigerian financial institutions were involved in very few strategic integration initiatives, particularly vertical integration. It is consequently recommended that Nigerian insurance and financial institutions improve the level of customisation offered to their clients to retain current clients and draw in new ones.

Credit risk management in small-scale farming by formal financial institutions during the COVID-19 era: Nigerian perspective

PurposeProviding loans, particularly to small-scale farmers, is one of the roles of formal financial institutions. Lending to small farmers is risky. An institution's health is closely related to the institution's ability to manage credit and portfolio risk. Expanding smallholder farmers' access to finance while maintaining a sustainable financial system is essential; however, pandemics present additional challenges. Accordingly, as reported in the literature, the pandemic's high loan default rates and decreases in return on assets (ROAs) call for further credit risk management research. There have been limited studies on credit risk management during coronavirus disease 2019 (COVID-19), so this article aims to provide useful information on its influences.Design/methodology/approachResearchers used data from formal financial institutions in 2018 (before COVID-19) and in 2021 (during COVID-19) to accomplish the study's broad objective. Descriptive and inferential statistics were the main analytical tools. The credit risk management indicators were categorized into collateral management, loan management, loan recovery management, governance and Information and Communication Technology (ICT). Weights were assigned to each category based on the importance to credit risk management. A binary logit model was employed in assessing the factors influencing credit risk management as proxied to loan repayment, while Ordinary Least Square (OLS) was used to examine factors that influence ROAs.FindingsOne of the most noteworthy findings is that credit risk management is affected by different factors and magnitudes before and during the COVID-19 era. Loan recovery and ICT management indicators were most influential during the pandemic. In addition, the study noted that low agricultural productivity during the pandemic contributed to an additional challenge in loan default rates because of various COVID-19-containing measures. Additionally, there was a lack of governance and ICT management capacity to drive credit and portfolio risk management during the epidemic.Originality/valueThe paper presents new empirical findings on credit risk management during the COVID-19 era. The study used a methodology which has not been used previously in credit risk management in Nigerian financial institutions. Therefore, this research could become the cornerstone of further academic research in other developing countries using this methodology.

Adoption of new accounting information in nigeria: is accounting information more relevant?

This paper discussed whether accounting information has an incremental value relevance among Nigerian financial institutions. The study is motivated by the Report on the Observance of Standard Code (ROSC) of 2014 and 2011, which report that Nigerian accounting reporting has been marred with non-compliance, non-update, and nondisclosures of accounting information. These have contributed to the sudden fall of the Nigerian stock market from 2008 to 2009 and Nigerian financial institutions that made investors lose confidence in the Nigerian capital markets. This situation provided an opportunity to study the value relevance of accounting information among Nigerian financial institutions. The study uses 52 listed financial institutions in Nigeria. The stock price model used in value relevance studies is employed for data analysis. Data is collected from Bank Scope and Thompson Reuters Data Stream. The study findings provide more value relevance of accounting information under IFRS. Furthermore, assets and liabilities provide positive and negative significant relationships with stock returns, respectively. Lastly, the study provides evidence of the value relevance of accounting information after adopting IFRS.

Adoption of new accounting information in nigeria: is accounting information more relevant?

This paper discussed whether there is an incremental value relevance of accounting information among Nigerian financial institutions. The study is motivated by the Report on the Observance of Standard Code (ROSC) of 2014 and 2011, which report that Nigerian accounting reporting has been marred with non-compliance, non-update, and non-disclosures of accounting information.These have contributed to the sudden fall of the Nigerian stock market from 2008 to 2009 and Nigerian financial institutions that made investors lose confidence in the Nigerian capital markets. This situation provided an opportunity to study the value relevance of accounting information among Nigerian financial institutions. The study uses 52 listed financial institutions in Nigeria. The stock return model used in value relevance studies is employed for data analysis. Data is collected from Bank Scope and Thompson Reuters Data Stream. The study findings provide more value relevance of accounting information under IFRS. Furthermore, assets and liabilities provide positive and negative significant relationships with stock returns, respectively. Lastly, the study provides evidence of the value relevance of accounting information after adopting IFRS.

Do Internal Corporate Governance Code, Capital Structure, and Ownership Structure Matter in Explaining the Performance of Nigerian Financial Institutions

The rise in financial scandals and corporate failures prompted a greater spotlight on CG, particularly as it pertains to financial institutions (FI). This research looks at how the corporate governance code, CS, and ownership structure affect financial institution performance in Nigeria. The data for the study was obtained from the annual financial reports of 37 financial service institutions as the sample between 2010 and 2019. Internal corporate governance code proxy by board size, board independence, board remuneration and audit committee size, capital structure proxy by long-term debt and equity and short-term debt and equity ratio, ownership structure proxy by board ownership, ownership concentration, and foreign ownership concentration are the independent variables used in this study. The dependent variable is performance proxy by earnings per share and Tobin's Q. The study used a dynamic panel GMM estimator to deal with the panel data models. The results show that the EPS of FI in Nigeria is positive and significantly influenced by board size and short-term debt to equity ratio. Board remuneration and the long-term debt to equity/assets ratio, on the other hand, have a negative and considerable effect on FI earnings per share. Similarly, for Tobin Q, Bindp and Bremu, except board size, negatively impacted FP of the Nigerian financial service industry. Capital structure proxies by long-term debt and equity and short-term debt and equity ratio exerted a considerable impact on Tobin's Q. Equally, the ownership structure has a considerable impact on Tobin's Q. As a result, we recommend that financial institutions in Nigeria prefer equity financing over long-term debt when funding capital projects. On the other hand, short-term debt obligations should be used to fund short-term initiatives to keep the firm's performance growing. The research is necessary to ensure that debt and equity ratios are used appropriately in financial sector funding firms to maximise return on capital.

BOARD ATTRIBUTES AND CREDIT RISK EXPOSURE OF LISTED FINANCIAL SERVICE FIRMS IN NIGERIA: THE MODERATING EFFECT OF RISK COMMITTEE

The existing risk governance in the financial service firms has not been able to ensure stability and sufficient performances, which resulted in excessive credit risk taking in the Nigerian financial institutions. This study examined the moderating effects of risk committee on the relationship between board of directors’ attributes and credit risk exposure of listed financial service firms in Nigeria. The study used secondary data for a period of 10 years (2010-2019) of a sample of 29 financial service firms. Panel multiple regression technique of data analysis was applied, and the study found after controlling for firm size, firm leverage and firm age that risk committee of the listed financial service firms in Nigeria has an effect on the relationships between board attributes and credit risk exposure. The study also found that there was a significant difference recorded before the moderation and after moderation of board size, board independence and board meetings with risk committee. The findings shows that the direction of the moderated variables changes after the moderation except for board gender diversity. The study also found that the level of significance of the variables changes for all the variables. This implies that the variables are affected when they are moderated with the risk committee. The study therefore recommends that the CBN, SEC and the board of directors of listed financial service firms should review the structure and composition of the risk committees of financial institutions in Nigeria.

The impact of audit quality on organizational effectiveness of listed banks in Nigeria

The objective of this study is to examine impact of audit quality on the organizational effectiveness of listed banks in Nigeria. Regression analysis was used to test the impact of audit quality on the organizational effectiveness of listed banks in Nigeria. The findings of this study reveal that all exemplary variables (Auditor Independence (AID), Audit Report (ADR) and Joint Audit (JOA)) have positive impacts on organizational effectiveness (OE) but are insignificant due to some reasons in Nigerian financial institutions. On these premises the study recommended that auditors should be monitored and there should be adequate regulatory provision to encourage the independence of the audit firms. The management and the regulatory agencies should emphasize on the audit report as this appears to be positive insignificant in improving organizational effectiveness. Regulatory agencies around the world should emphasize on joint audit as it appears positive insignificance in providing organizational effectiveness in the listed banks in Nigeria.

Risk governance and firm value: exploring the hierarchical regression method

This study examines the impact of risk governance on firm value of 50 listed firms in the Nigerian financial institutions for the period of five years (2013-2017). The study provides empirical evidence which shows that risk governance variables (enterprise risk management index, chief risk officer presence, board risk committee size, board risk committee activism, and board risk committee independence) have a positive and significant impact on firm value. Similarly, firm attribute variables (firm size and firm age) have a significant positive impact on firm value while on the contrary corporate governance variables (board size and board of directors independence) show a negative but a significant impact on firm value. The empirical evidence observed in this study reveals that the institutionalisation of risk culture, strong risk oversight functions and increase in risk accountability by the board have greater tendency to enhance the value of a firm. This study contributes to the growing literature in the area of corporate reporting, risk governance and risk management research in Africa.

Risk governance and firm value: exploring the hierarchical regression method

This study examines the impact of risk governance on firm value of 50 listed firms in the Nigerian financial institutions for the period of five years (2013-2017). The study provides empirical evidence which shows that risk governance variables (enterprise risk management index, chief risk officer presence, board risk committee size, board risk committee activism, and board risk committee independence) have a positive and significant impact on firm value. Similarly, firm attribute variables (firm size and firm age) have a significant positive impact on firm value while on the contrary corporate governance variables (board size and board of directors independence) show a negative but a significant impact on firm value. The empirical evidence observed in this study reveals that the institutionalisation of risk culture, strong risk oversight functions and increase in risk accountability by the board have greater tendency to enhance the value of a firm. This study contributes to the growing literature in the area of corporate reporting, risk governance and risk management research in Africa.

Risk governance and cybercrime: the hierarchical regression approach

This study examines the impact of risk governance on cybercrime of selected listed firms in the Nigerian financial institutions. To achieve this, a sample size of 50 listed companies from the Nigerian financial sector was selected for the years 2013–2017, resulting in 250 observations. The study employed the use of hierarchical regression analysis to test the impact of risk governance variables (Chief Risk Officer_centrality, Enterprise Risk Management_index, Chief Risk Officer_presence, Board Risk Committee_size, Board Risk Committee_activism, and Board Risk Committee_independence) and other control variables such as corporate governance variables (Board Size and Board of Directors_independence) and firm characteristics variables (Firm size and firm age) on cybercrime. The study observed from the findings that almost all the explanatory variables present a positive and significant relationship with cybercrime, except the Chief Risk Officer_presence, firm age and Board Risk Committee_size which revealed an insignificant relationship with cybercrime. The study concludes that risk governance variables and other variables are likely to reduce and minimize the impact of cybercrime on the sampled firms used in this study.

Development of Corporate Governance and the Effect of Corruption on the Nigerian Financial Institutions

Development of Corporate Governance and the Effect of Corruption on the Nigerian Financial Institutions

Impact of business ethics on Nigerian financial institutions

Ethics represent sets of high moral standards and requirements in office holders. This is on the premise that they will be held accountable for any form of misdemeanor. It is also all encompassing and serves as yardsticks for judgment of societal uprightness. The murky waters of business are neck-deep in different types of moral and immoral dealings. Shortcuts and unconventional practices have become prevalent. The codes of ethics which are the sets of moral principles are relegated to the background. The banking industry which plays an inter-mediation role in every economy has its own fair share of these unethical practices. This paper therefore explores this Trojan and its impacts on the Nigerian financial institutions. Findings reveals plethora of unhealthy practices and discusses their effects on these institutions. Furthermore, the paper recommends the need for a total clean-up and proposes that government must intervene to sanitize these institutions which serve as the heart and soul of the Nigerian economy.

Impact of Business Ethics on Nigerian Financial Institutions

Ethics represent sets of high moral standards and requirements in office holders. This is on the premise that they will be held accountable for any form of misdemeanour. It is also all encompassing and serves as yardsticks for judgment of societal uprightness. The murky waters of business are neck-deep in different types of moral and immoral dealings. Shortcuts and unconventional practices have become prevalent. The codes of ethics which are the sets of moral principles are relegated to the background. The banking industry which plays an intermediation role in every economy has its own fair share of these unethical practices. This paper therefore explores this Trojan and its impacts on the Nigerian financial institutions. Findings reveals plethora of unhealthy practices and discusses their effects on these institutions. Furthermore, the paper recommends the need for a total clean-up and proposes that government must intervene to sanitise these institutions which serve as the heart and soul of the Nigerian economy.

Does enterprise risk management impact accounting quality? Evidence from the Nigerian financial institutions

This research empirically looked at Enterprise Risk Management impact on accounting quality of selected listed firms in the Nigerian financial sector. The study engaged the use of content analysis of the selected listed firms’ annual financial reports and corporate websites in determining the ERM disclosure index and its impact on accounting quality for a period of five years (pre-ERM period) (2007–2011) and another five years period (post-ERM period) (2013–2017). In attaining the proposed objectives, the study employed the panel Generalized Method of Moments estimator to test the hypotheses and find out the relationship between the variables. The study observed from the findings that there is no significant association between enterprise risk management and accounting quality during the pre-ERM period. This study adds to the body of knowledge in the area of corporate reporting, risk disclosure, risk management and accounting quality in emerging economies especially the Sub-Saharan African countries.

Chief financial officer roles and enterprise risk management: An empirical based study

This study investigates the influence of CFO roles on the implementation of ERM initiatives in a sample of Nigerian financial institutions (between 2013-2017). We develop three distinct factors representing the CFO roles namely CFO power, CFO experience and CFO knowledge using principal component factoring. Like prior work, we measure ERM components simultaneously to capture the extent of sophisticated ERM system. Our findings pose that the CFO involvement in ERM implementation remains minimal while the CRO is solely responsible for ERM implementation, which could undermine cost-benefit effectiveness. Our empirical evidence reports that the sophisticated ERM only promote the market evaluation while the accounting performance is undermined. The result then contravenes the expectation that effective ERM enhances accounting performance by mitigating risk exposure. While the sophisticated ERM is significantly positive with leverage, which reveals that ERM implementation does not necessarily reduce the firm risk. This indicates that the ERM implementation remains ineffective to mitigate risks, where the CFO involvement in the ERM initiative is limited. We then advocate that CFOs should be allowed to contribute strongly on some specific aspects of ERM initiatives namely identification and analysis of key risk indicators, the financial implication of risks and integration of ERM into traditional finance activities.

Micro Financing as Strategy for Poverty Alleviation and Economic Empowerment in Osun State, Nigeria

The focus of this study is to examine the Impact the micro loans being granted by Nigerian Financial Institutions have on the poverty level and the empowerment of the people of Osun State of Nigeria as evidenced from selected Financial Institutions in Osun State. The methodology adopted was descriptive survey research method; this method of research was used in order to analyze microcredit and loans from financial institutions that serve as catalyst for economic growth and reduction in poverty level in the State. The population of the study is financial institutions in Osun State; 5 commercial and 5 micro finance banks were selected, using simple random sampling procedure. 10 staff was administered questionnaire in each bank, making 100. However, 85 questionnaires were properly returned and accounted for, while 15 were unreachable. Simple regression analysis was used to test hypothesis in order to determine the degree of connections between the variables with the aid of Statistical Package for Social Science (SPSS) version 23. Findings show that availability of microcredit is statistically significant in predicting the dependent variable (reducing poverty). Keywords : Strategy, Financial Institutions, Commercial Banks, Microfinance Banks, Microcredit, Poverty Reduction. Economic Empowerment. DOI : 10.7176/EJBM/11-5-06

The Mediating Effect of CEO Characteristics on the Relationship between Corporate Governance Attributes and Earnings Management in Nigerian Financial Sector: Proposed Conceptual Framework

Corporate governance comprises a couple of relationships that exist between the management of the company, its auditors, its board of directors, shareholders and other stakeholders. These relationships in other words, involve various rules and incentives and then offer the structure through which the aims and objectives of the company are set, and the means of achieving these objectives as well as providing effective transparency among managers and shareholder. This study attempt to investigate the mediating effect of CEO characteristics on corporate governance attributes and earning management due to the recent financial frauds in the Nigerian financial institutions. The study covered all the 58 listed financial institutions on the main flow of the Nigerian Stock Exchange comprising banks and other non-banks financial services in 2016, the entire population is also the sample size of the study. The study applied the use of a secondary source of data collection from annual reports and financial statements of the selected companies from 2012 to 2016.The expected outcomes of the study relied on the earlier studies which suggested that corporate governance attributes play a vital role in safeguarding the integrity of financial reporting process, the CEO characteristics is perceived to save as a link between corporate governance attributes and earnings management, to act as a third party which helps in mitigating information asymmetry and clash of interests among management and shareholders.