IIARD International Institute of Academic Research and Development

IIARD International Journal of Economics and Business Management (IJEBM )

E-ISSN 2489-0065
P-ISSN 2695-186X
VOL. 8 NO. 1 2022

---

Macroeconomic Variables and Corporate Resilience: Empirical Evidence from Quoted Commercial Banks in Nigeria

Orlu, Lucky, Amini, Maton-Awaji Clifford & Amadi, Celestine Rose

---

Abstract

The study investigated the effects of macroeconomic variables and quoted commercial banks resilience in Nigeria. The study adopted ex-post facto research design. Stratified and random sampling methods were used to select 13 out of the 22 quoted existing commercial banks. Secondary data were obtained from the Central Bank of Nigeria publications and financial statement of the quoted commercial banks. Commercial bank resilience (variation in capital adequacy ratio) modeled as the function of interest rate, real gross domestic products, exchange rate, inflation rate and money supply. A critical analysis of the financial statements of the commercial banks over a period of 10 years (2011- 2020) was conducted. Diagnostic tests were conducted using Hausman specification test. Fixed effects estimator was employed and regression analysis to test the formulated hypotheses. The study found that 51.6 percent variations in commercial banks resilience can be attributed to the influence of economic variables while the remaining 48.9 percent variations in the dependent variable were caused by other factors not included in this model. The p-value of the F-statistic found that simultaneous combinations of the proxies of the macroeconomic indicators significantly influence commercial banks resilience since it is less than the 0.05 significant level adopted for this study. the study conclude that the variables have positive but no significant effect on commercial banks resilience within the periods covered in the study.it therefore recommend that . Government should ensure that financial market is properly managed in a manner that it will enhance commercial bank resilience. Government should direct its financial market regulators to ensure proper policies that will enhance effective transmission of macroeconomic policies that impact positive and significantly to commercial banks resilience and the need for efficient management of exchange, inflation and interest rates in such a way to

keywords:

Macroeconomic Variables, Corporate Resilience, Quoted Commercial Banks, Nigeria

---

References:

Abdullah, MN, Parvez, K, and Ayreen, S (2014). Bank specific, industry specific and
macroeconomic determinants of commercial bank profitability: A case of
Bangladesh', World Journal of Social Sciences, 4(3), 82 – 96.

Abiad, A., Bluedorn, J., Guajardo, J., & Topalova, P. (2012). The rising resilience of
emerging market and developing economies. IMF Working Paper, WP/12/300

Abobakr, M.G. (2018)). Bank specific, industry concentration, and macroeconomic
determinants of Egyptian banks' profitability', International Journal of Accounting and
Financial Reporting, 8(1), 380-397.

Adnan, H., & Rahat, M. (2020). EBL Dutch-Bangla and RRAC bank on top Banik Barta,
August 23, available at: https://bonikbarta.net/home/news_description/239106/
(accessed 16 September 2020).

Alamer, A. R. A., Salamon, H. B., Qureshi, M. I., & Rasli, A. M. (2015). A new business
process and outcome oriented corporate social responsibility index for Islamic
banking. International Journal of Economics and Financial Issues, 5(1S), 207-214.

Aldasoro, I., Fender, I., Hardy, B., & Tarashev, N. (2020). Effects of COVID-19 on the
banking sector: the market’s assessment. BIS Bulletin, 12(12), 1-9.

Almumani, MA (2013). Impact of managerial factors on commercial bank profitability:
Empirical evidence from Jordan. International Journal of Academic Research in
Accounting, Finance and Management Sciences, 3(3), 298–310.

Alpera, D., & Anbarb, A (2011). Bank specific and macroeconomic determinants of
commercial bank profitability: empirical evidence from Turkey. Business and
Economics Research Journal 2(2), 139-152.

Alshatti, A.S (2015). The effect of credit risk management on financial performance of the
Jordanian commercial banks. Investment Management and Financial Innovations,
12(1), 338-345.

Akani, H. W. (2019). Effects of cross border banking on growth of deposit money banks in
Nigeria. International Journal of Interdisciplinary Research Methods, 6(5), 1-26.

Akani, H. W., & Lucky, A. L., (2014). Money supply and aggregate stock prices in Nigeria:’
An analysis of co-Integration and causality test. Research Journali’s Journal of
Finance, 2 (10), 1 – 24.

Akani, H.W. & Akani, V. C. (2019). Theoretical perspectives of earnings, profitability and
asset quality in banking: Descriptive evidence from Nigeria economy. World Journal
of Finance and Investment Research, 8(1), 1-24.

Agwor, T. C. & Akani, H. W. (2020). Board composition and profitability of deposit money
banks in Nigeria: A multivariate panel data analysis. Journal of Accounting
Information and Innovation, 6(9), 11-26.

Akani, H.W., & Lucky, A. L. (2020). Financial deficiency syndrome and behaviour of low
income Earners in rural communities of Rivers State, Nigeria. International Journal
of Small Business and Entrepreneurship Research, 8 (1), 14-3.

Anbar, A., & Alper, D (2011). Bank Specific and Macroeconomic Determinants of
Commercial Bank Profitability: Empirical Evidence from Turkey Business and
Economics Research Journal, 2(2), 139-152.

Angeon, V., & Bates, S. (2015). Reviewing composite vulnerability and resilience indexes: A
Sustainable Approach and Application. World Development, 72, 140-162.

Claessens, S., Ghosh, S. R., & Mihet, R. (2014). Macro-prudential policies to mitigate
financial system vulnerabilities. IMF Working Paper, WP/14/155.

Assegaf, Z., Putri, R., Mitra, A., & Syarief, A. (2014). Analisis Pengaruh Variabel
Makroeconomi Terhadap Kinerja Keuangan Bank Syariah Di Indonesia (Periode
Tahun 2007-2013). Media Ekonomi Universitas Trisakti.

Barua, B. & Barua, S. (2020). COVID-19 implications for banks: the case of an emerging
economy. SN Business Economics Journal, 1(19), 78-100.

Bhattarai, A.K., Akhtar, M.F., & Ahmed, H. Z. (2011). Bank-specific and macroeconomic
indicators of profitability - Empirical evidence from the commercial banks of
Pakistan. International Journal of Business and Social Science, 2(6); 235-242.

Bhattarai, Y.R. (2017). Credit Risk and Commercial Banks’ Profitability in Nepal: A Panel
Approach. Journal for Studies in Management and Planning, 3(6), 1-15.

Bilal, M, Saeed, A, Gull, A.A., & Akram, T (2013). Influence of bank specific and
macroeconomic factors on profitability of commercial banks: A case study of
Pakistan. Research Journal of Finance and Accounting, 4(2), 117-129.

Bryan, J., Clempner, J. & Low, S. (2020). The role of retail banks in fighting COVID-19”,
Oliver Wyman, available at: https://www.oliverwyman.com/our-
expertise/insights/2020/apr/covid-19- retailbanking.html (accessed 11 October 2020).

Bui, C., Scheule, H., & Wu, E. (2017). The value of bank capital buffers in maintaining
financial system resilience. Journal of Financial Stability, 33, 23-40

Combey, A., & Togbenou, A. (2017). The bank sector performance and macroeconomics
environment: Empirical evidence in Togo. International Journal of Economics and
Finance, 9(2), 67-80.

Djan, G.O, Stephen, F, Bawuah, J, Halidu, O.B. & Kuutol, PK (2015). Credit risk
management and its impact on financial performance of listed banks Ghana'.
International Journal of Financial Markets, 2(2), 24-32.

Duasa, J., Kusuma, W. B., & Sumandi. (2016). Building an Early Warning Towards The
Resilience of Islamic Banking in Indonesia. Bulletin of Monetary Economicsn and
Banking, 2

Fura, B., & Wang, Q. (2017). The level of socioeconomic development of EU countries and
the state of ISO 14001 certification. Quality and Quantity, 51(1), 103-119.

Goodell, J.W. (2020). COVID-19 and finance: agendas for future research. Finance
Research Letters, 35(5), 45-65.

Hossain, S. (2020). Default loans rise Tk3,606cr amid pandemic The Business Standard,
August 23, available at: https://tbsnews.net/economy/default-loans-rise-tk3606cr-
amid-pandemic-123277

Kaaya, I., & Pastory, D. (2013). Credit Risk and Commercial Banks Performance in
Tanzania: a Panel Data Analysis. Research Journal of finance and Accounting, 4(16),
55-62.
Kamandea, E. G., Zablonb, E, & Ariembac, J. (2016). The effect of bank specific factors on
financial performance of commercial banks in Kenya. International Journal of
Sciences: Basic and Applied Research (IJSBAR), 30(5), 165-180.

Kanwal, S., & Nadeem, M. (2013). The impact of macroeconomic variables on the
profitability of listed commercial banks in Pakistan. European Journal of Business
and Social Sciences, 2(9), 186-201

Khan, A., Chaudhry, I. S, & Saeed, S.,(2019).Islamic Vs. Conventional Commercial
Banking: the Resilience Avantgarde. Journal of Accounting and Finance in Emerging
Economies, 5(2),261-274

Khrawish, H.A. (2011). Determinants of commercial banks performance: evidence from
Jordan. International Research journal of Finance and Economics, 8(1), 148-163.

Kodithuwakku, S (2015). Impact of credit risk management on the performance of
commercial banks in Sri Lanka. International Journal of Scientific Research and
Innovative Technology, 2(7), 1-6.

Korzeb, Z., & Niedzio?ka, P. (2020). Resistance of commercial banks to the crisis caused by
the COVID-19 pandemic: the case of Poland. Equilibrium. Quarterly Journal of
Economics and Economic Policy, 15(2), 205-234,

Korzeb, Z., & Samaniego-Medina, R. (2019). Sustainability performance. A comparative
analysis in the polish banking sector. Sustainability, 11(3), 653-669.

Kurawa, J.M., & Garba, S., (2014). A evaluation of the effect of credit risk management
(crm) on the profitability of Nigerian banks. Journal of Modern Accounting and
Auditing, 10(1), 104-115.

Lim, S. S., Loke, J. C., Ong, E. P., & Yeoh, S. C. (2015). Factors affecting performance of
Islamic banks and conventional Banks: Evidence from Malaysia. University of Tunku
Abdul Rahman.

Maheswaran, M. and Rao, D.N. (2014). Stress test for risk assessment under Basel
framework applied in banking industry. Risk Governance and Control: Financial
Markets and Institutions,

DOWNLOAD PDF

---

Back