Profitability Of Deposit Money Banks Research Articles

Liquidity Management and Profitability of Deposit Money Banks in Nigeria: An Impact Analysis

This study empirically examined the impact of liquidity management on profitability of deposit money banks in Nigeria. The specific objectives were to determine the impact of cash management on banks’ return on asset, evaluate the impact of shareholders’ capital on banks’ return on asset and ascertain the relationship between loan to deposit ratio and return on assets of banks. Expost facto design was adopted. The data used for this study were collected from Central Bank of Nigeria (CBN) and Nigeria Deposit Insurance Corporations (NDIC) covering the period 1995-2021. Data collected were analyzed using descriptive statistics and multiple regression analysis. Findings revealed that cash management and shareholders’ capital have significant relationship with banks’ return on assets. It however showed that there is significant relationship between loan to deposit ratio and return on assets. Based on the findings, it recommended that the bank management device efficient cash management policies to enhance their profitability

Financial Management Practices and Profitability of Deposit Money Banks in Nigeria

The study aims to investigate the financial management practices and profitability of deposit money banks in Nigeria. It is guided by The Stakeholder theory and The Porter’s theory. The research design employed for this study is ex-post facto. The universal population includes all DMB in Nigeria that were operational as of 2022. Secondary data were collected from the annual reports of selected commercial banks in Nigeria, which will be used as panel data for the study. The results of the study revealed significant impacts of various financial management practices on profitability. Non-performing loan showed a significant impact on profitability, as evidenced by a high F-statistic of 10.62768 and a low p-value of 0.000001. Similarly, Loan Loss Provision Ratio demonstrated a significant impact on profitability, with an F-statistic of 9.218826 and a p-value of 0.000034. Furthermore, Loan and Advance Ratio also had a notable impact on profitability, with a significant F-statistic of 11.13815 and a low p-value of 0.000005. Additionally, Capital Adequacy ratio was found to have a significant impact on profitability, supported by an F-Rstatistic of 0.976643 and a p-value of 0.009176. It was determined that financial management procedures significantly influence the profitability of Deposit Money Banks in Nigeria, proving that these practices are important in determining the financial success of the banks under investigation. The following recommendations were made to improve banks' financial performance: to enhance loan loss provisioning, increase loan and advance ratio, concentrate on capital adequacy and financial stability, and strengthen credit risk management.

Portfolio management and performance of deposit money banks (Dmbs) in Nigeria (1990–2020)

There have been a renewed focus on portfolio management of deposit money banks since the global financial crisis of 2007–09. This renewed focus is based on the understanding that an efficient portfolio management reduces risks and loss associated with uncertainty of investment returns which may impact on the performance of banks. In this study, we investigated the connection between portfolio management and performance of deposit money banks in Nigeria. The study essentially sought to ascertain whether portfolio management has predictive value for the out-of-sample predictability of profitability of deposit money banks in Nigeria. The Markowitz portfolio theory underpin the study while time series data on deposit money banks’ liquidity, financial assets, foreign portfolio asset, deposit mix, and private sector concentration were utilized for the analysis. The time series spanned from 1990 to 2020 based on data availability. To increase the robustness of the result, the entire 24 DMBs were included in the study. The unit root test and bound cointegration test were employed to check times series behaviour of the variables. The Autoregressive Distributed Lag (ARDL) was used to estimate both the short-run and long-run dynamics and rapid correction to long-run equilibrium. Our findings reveal that portfolio management and its variants had significant effect on the profit after tax (PAT), return on investment (ROI), asset quality (ASQ), and capital adequacy (CA) of deposit money banks in Nigeria.

Evaluation of the Liquidity Management on Deposit Money Banks’ Performance in Nigeria

This study examined the effect of liquidity management on banks' performance in Nigeria for the period of ten (10) years (2012-2021). This is necessitated to respond to the fact that some Deposit Money Banks in Nigeria have some time ago been declared technically insolvent as a result of poor liquidity management, therefore the study is poised to find empirical evidence of the degree to which effective liquidity management affects the profitability of Deposit Money Banks, and how these banks can enhance their liquidity and profitability positions. Four proxies for liquidity management (liquidity ratio, cash ratio, efficiency ratio and loan-to-deposit ratio) were regressed against Tobin's q using Fixed Panel Least Square method in the model estimation. Other preliminary tests carried out include the descriptive statistics test, Levin, Lin and Chu (LLC) unit root and the Hausman Specification tests. The findings of the study indicate that liquidity management and efficiency ratio have a positive and significant relationship with the performance of Deposit Money Banks in Nigeria. On the other hand, the Cash Ratio has a negative and insignificant relationship with the performance of Deposit Money banks in Nigeria. Based on the above findings, the study concludes that there is a significant positive relationship between liquidity management and bank performance in Nigeria. Finally, the study recommends that banks should embrace measures that will make certain or ensure effective liquidity management rather than directing attention, time and resources to the profit maximization concept only. This, therefore, indicate that banks should invest the available excess cash in shortterm instruments of the money market.

HOW KNOWLEDGE ASSETS AFFECT PROFITABILITY AND MARKET VALUE OF LISTED DEPOSIT MONEY BANKS IN NIGERIA

The study examines the impact of knowledge assets on profitability and market value of listed deposit money banks (DMBs) in Nigeria for the period 2015 to 2021. Thirteen listed DMBs with reporting currency in Naira were used for the study. The total firm year for the study is 91. Multiple regression analysis was used as instrument of analysis. Chow test and Hausman test were conducted to determine the appropriate regression model. Results show that Value Added Intellectual Coefficient (VAIC) has a positive effect on market value and profitability of DMBs in Nigeria. The individual components, human assets efficiency (HAE) and structural assets efficiency (SAE) were found to have a positive effect, while total assets efficiency (TAE) has a negative impact on market value of deposit money banks in Nigeria. VAIC was found to have a positive effect on profitability of deposit money banks in Nigeria. With the consideration of the individual components, HAE and SAE have a positive effect on return on assets (ROA) and return on equity (ROE) but a negative effect on revenue growth (RG). TAE has a negative effect on ROA and ROE with a positive effect on RG of DMBs in Nigeria. To improve their profitability and thus their market value, deposit money banks are advised to step up development and training of their human resources, structures and processes, through the development of information technology, and customer relationship management.

Relationship Between Statutory Payments and Profitability of Deposit Money Banks in Nigeria

Relationship Between Statutory Payments and Profitability of Deposit Money Banks in Nigeria

Effect of earnings generation and retention capacity on the financial performance of Deposit Money Banks in Nigeria

This study evaluates the generation and retention capacities of financial earnings of Deposit Money Banks (DMBs) in Nigeria. There has been a widening gap between earnings generated and portion of the earnings retained thereof vis-a-vis the annual financial profits disclosures by DMBs, hence this study examines whether Earnings Generation Capacities (EGC) and Earnings Retention Capacities (ERC) of DMBs optimize their annual financial profit disclosures. This study adopts the ex post facto research design using secondary data from annual reports of seven DMBs from 2015 to 2020. Panel Regression Technique aided by E-View 9.0 statistical software was used for analyses. The results show that EGC and ERC have significant positive and negative effects respectively on the profitability of DMBs in Nigeria. This implies that assets of the DMBs are underutilized and cost management strategies under-optimized thereby undermining the achievement of optimal earnings generation and retention capabilities. The study recommends that DMBs need to improve on their asset utilization strategies and also adopt efficient in-house cost curtailment initiatives on Procurement and Equipment Asset Maintenance Costs (PEAMC) to enable DMBs to boost profitability, and strengthen going concern to meet shareholders’ return expectations.

THE EFFECTS OF OPERATIONAL RISK AND MARKET RISK ON THE PROFITABILITY OF DEPOSIT MONEY BANKS IN NIGERIA: A PANEL-ARDL ANALYSIS

The study examined the effects of operational risk and market risk on the profitability of Deposit Money Banks in Nigeria. The broad objective of the study was to ascertain the effect of risk management components (operational risk and market risk) on the profitability of deposit money banks in Nigeria. The study is a longitudinal survey, so the ex-post facto research design was applied. Research data were analysed using A Panel-ARDL Analysis, after testing and adjusting the data for stationarity and Cointegration. The research findings were: in the long-run, the operating risk increase profitability because the banks have longer time to adjust and minimize the risk involved in their operation which resulted to a positive effect but have a shorter time in the short-run to adjust which resulted in a negative and decreasing effect in their profitability. Also, in the short-run, the increase in the market risk will significantly increase the profitability of the selected banks under study. But in the long-run the relationship is negative. The study contributed to knowledge by establishing that; the effects of operating risk and the market risk affect profitability of the deposit money banks in the long-run and the short-run differently.

The Economic Implication of Cash Reserve Requirement on the Profitability of Deposit Money Banks in Nigeria

This paper investigated the impact of cash reserve requirement on the profitability of deposit money banks in Nigeria over the period of 31years between 1988 and 2018. Quantitative secondary data from the Central Bank of Nigeria (CBN) Statistical Bulletin 2018 edition was considered in the study. The study employed Augmented Dickey-Fuller Unit Root Test, Co integration test, Granger Causality test and multiple regressions methods for the empirical test. It was revealed that there is long-run relationship between cash reserve requirement and the profitability of deposit money banks in Nigeria with the test of Johanson co integration. It was further revealed that there is no unidirectional or bidirectional relationship between cash reserve requirement and profitability of deposit money banks in Nigeria. The study revealed that cash reserve requirement has an inverse relationship with profitability of banks although, f-statistics indicated that cash reserve requirement with other variables included in the model have a significant impact on the profitability of banks in Nigeria for the period under review. Based on these findings, the study concluded that cash reserve requirement has a significant impact on the profitability of deposit money banks in Nigeria. Therefore, the study recommends among others that the monetary authority should ensure that the cost of funds such as interest rate and lending rate should be at a reasonable rate.

Effect of Selected Macroeconomic Variables on the Profitability of Deposit Money Banks in Nigeria: 2007-2018

This study examines the effect of selected macroeconomic variables on the profitability of deposit money banks in Nigeria. The study is based on the arbitrage pricing theory (APT) propounded by Ross (1976) and secondary data was used for the study. The hypotheses were tested using the OLS multiple regression analysis and results reveal that, Interest rate (H01) with B = -0.254, t = -0.237, p = .819; Exchange rate (H02) with B = -0.076, t = -2.093, p = .075 Gross domestic product (H03) with B = 0.643, t = 0.545, p = .602 and Inflation rate (H04) with B = 0.182, t = 0.343, p = .743 are not significant predictor of Net interest margin. The implication is that, the selected macroeconomic variables are not a significant predictor of deposit money bank profitability for the period of study.

Macroeconomic Variables and Profitability of Deposit Money Banks Listed in Nigeria

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

Effect of Mobile Workforce Management Strategies on Performance of Deposit Money Banks in South East Nigeria

Members of the mobile workforce and deposit money banks that employ them face a double-edged sword. On the one hand, it is desirable for mobile workers to remain as productive as possible when they are on the road. Unfortunately, life is not perfect and neither are people, so how do deposit money banks gauge whether a mobile employee is an asset or liability? On the other hand, not all venues that accommodate these workers are entirely conducive to productivity. The main objective of the study is to investigate the effect of mobile workforce management strategies on performance of deposit money banks in South East, Nigeria. The specific objectives sought were to: determine the effects of mobile technology on productivity of deposit money banks in South- East, Nigeria, establish the extent of the effect of biometric time and attendance system on deposit money banks market share in South- East, Nigeria, assess the effects of mobile applications on stakeholders’ level of satisfaction of deposit money banks in South- East, Nigeria, ascertain the effect of contemporary environmental factors on the growth of deposit money banks in South- East, Nigeria and determine the relationship between the challenges of mobile workforce management strategies and the profitability of deposit money banks. The researcher adopted the survey design for the study. The population of the study is Six thousand four hundred and ten (6,410) comprised of both the senior and junior staff of the selected eleven deposit money banks in South East Nigeria. Primary and secondary sources of data were used in the course of the study. Works of other authors related to the study were reviewed. The sample size is five hundred and eleven (511) determined, using the finite population formula of Godden. The researcher adopted both parametric and non parametric techniques for data analysis. The Cronbach’s Alpha coefficient yielded 0.87, indicating the reliability of the instrument. The data collected was analyzed using Spearman Pearson correlation coefficient, simple and multiple regression model. The findings indicated that: Mobile technology had positive effect on productivity of deposit money banks in South- East Nigeria (r = 0.932 p > 0.05). Biometric time and attendance system to a great extent enhanced deposit money banks’ market share in South East Nigeria (r = 0.960, p > 0.05) Mobile workforce management strategies positively affected deposit money banks stakeholders’ level of satisfaction (r =0.950, p > 0. 05). Contemporary environmental factors such as government regulation, economic conditions, technological advancement and workforce demographics to a great extent had a positive effect on the growth of deposit money banks. (r =0. 962, p > 0.05).There was a positive significant relationship between challenges of mobile workforce management strategies (hackers’ infiltration, network failure and human error and the profitability of deposit money banks (r = 0.981, p > 0.05). The study concluded among others that mobile workforce management strategies offer deposit money banks critical improvements in growth and stakeholders’ level of satisfaction. The study recommended among others that management of deposit money banks should ensure that right tools and resources are made available to mobile workers, giving them the same connectivity as office based workers.

Knowledge Management Strategies and Profitability of Selected Deposit Money Banks in Nigeria

This study examines the knowledge management strategies on profitability of selected deposit money banks in Nigeria. The study employed the survey research design. The population was 2,405 management staff of the selected deposit money banks in Nigeria. The sample size of 481 was determined using Krejcie and Morgan table. Multi-stage sampling was used to select the respondents. A validated questionnaire was used for data collection. The result revealed that knowledge management strategies had significant influence on the profitability (Adj.R2 = 0.520, F(2, 429) = 234.452, p < 0.05) in the selected deposit money banks in Nigeria. The study concludes that knowledge management strategies contributed to profitability of deposit money banks in Nigeria. The study recommends that person-to-person transfer of knowledge should be improved on. Finally, the Central Bank of Nigeria should formulate a policy to establish knowledge management in the deposit money banks.
 Keywords: Deposit money banks, Profitability, Knowledge management strategies, Knowledge management

A Statistical Assessment of Liquidity Management and Profitability in a Cross Section of Deposit Money Banks in Nigeria using Panel Analysis

The objective of this study was to examine the relationship between liquidity and profitability of deposit money banks in Nigeria using panel approach. The study made use of a sample size of ten deposit money banks in Nigeria. Data used for the study were sourced from the annual reports of the sampled firms and the statistical bulletin of the Central Bank of Nigeria ranging from 2006 to 2016. The liquidity indicators that were used were current ratio (current assets to current liabilities) (CRT), cash to total asset ratio (CTA), cash to total deposit ratio (CTD), liquid asset to total assets ratio (LATA), and loan to total deposit ratio (LTD), while return on assets (ROA) was used as proxy for profitability. A panel data regression model was specified and estimated. The empirical results showed that there was a positive and statistically significant relationship between cash to total asset (CTA) ratio and liquid asset to total assets (LATA) with profitability, and there was a negative but statistically significant relationship between cash to total deposit (CTD) ratio and profitability. It was also revealed that current ratio (CRT) and loan to total deposit (LTD) had a positive but statistically not significant relationship with profitability. It was recommended that the deposit money banks should not only focus on the profit maximization perception but also embrace methods that will certify effective and efficient liquidity management since its survival and sustainability depends on effective liquidity management and profitability. This will help to reduce the negative effects of the incidence of deficient and excessive liquidity.

The impact of digital banking on the profitability of deposit money banks: Evidence from Ghana

The impact of digital banking on the profitability of deposit money banks: Evidence from Ghana

Effects of Financial Innovations on the Profitability of Deposit Money Banks in Nigeria

Effects of Financial Innovations on the Profitability of Deposit Money Banks in Nigeria

Effect of Electronic Banking on the Profitability of Deposit Money Banks in Nigeria

Effect of Electronic Banking on the Profitability of Deposit Money Banks in Nigeria

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.

Board Independence and Financial Performance of Deposit Money Banks in Nigeria and Canada

Introduction: In current eras, supervisory bodies have interceded in the operations of Deposit Money Banks. This is because they are confronted with plethora of problems such as overexpansion; corruption of bank officers, inappropriate risk management and these resulted to poor financial performance.
 Aims: The present study aims to focus on the link amid board independence and financial performance of Deposit Money Banks as well as providing a comparative view by focusing on Nigeria and Canada.
 Methods: This study seeks to observe the association amid board independence and corporate financial performance of Deposit Money Banks in Nigeria and Canada. The panel data methodology is widely recommended for it is useful when data is a blend of time-series and cross-sectional features. The study applied secondary data extracted from annual financial statements of Deposit Money Banks quoted on the Nigerian Stock Market and in the Canadian stock market between the ten years period of 2008 and 2017.
 Results: The variables considered in this study are return on asset (ROA) (dependent variable), proportion of independent non-executive directors on board (BIND) and audit committee independence (ACI) (independent variables), earnings per share (EPS) and firm size (FSIZE) which are control variables. From the findings, it is revealed that there exists a significant relationship between board independence and profitability of deposit money banks in Nigeria and Canada.
 Conclusion: Empirical results obtained reveal that audit committee independence promoted financial performance of the deposit money banks in Nigeria while in Canada it was positive and insignificant. Thus, a greater proportion of audit committee independence would bring about a greater level of financial performance in deposit money banks in Nigeria and Canada. The aspect of corporate governance implies that banks will profit by increasing the number of its independent directors and independent audit committee members.

Effect of Capital Adequacy Ratio (CAR) on Profitability of Deposit Money Banks (DMB’s): A Study of DMB’s with International Operating License in Nigeria

The study examined the Effect of Capital Adequacy Ratio (CAR) on Profitability of Deposit Money Banks (DMB’s) as obtained from their annual report for 2017 using their Return on Assets (RoA) as Profitability parameter. OLS method was used via SPSS 20.0 to run the data used in the research with findings that; there exist a strong positive relationship between CAR and ROA of Deposit Money Banks (DMB’s) in Nigeria and recommends that the banks’ regulators should not only focus on Capital Adequacy but also on strategic monitoring and evaluation to maintain banks’ financial strength and stability in Nigeria. Keywords: Capital Adequacy Ratio (CAR), Profitability, Deposit Money Banks (DMB’s) DOI : 10.7176/RJFA/10-10-10 Publication date :May 31 st 2019