Bank Functions and Financial Performance of Quoted Commercial Banks in Nigeria

GODWIN; Nkpe Ph.D

Bank Functions and Financial Performance of Quoted Commercial Banks in Nigeria

GODWIN, Nkpe Ph.D

Abstract

This study examined the effect of effective banking practices on the performance of listed commercial banks in Nigeria. Cross sectional data was sourced from financial statement of commercial banks and Central Bank of Nigeria Statistical bulletin from 2011-2020. Return on equity was proxied for dependent variable while the independent variables were by liquidity reserve, credit allocation, deposit mobilization and risk management. Panel data methodology was employed while the fixed effects model was used as estimation technique at 5% level of significance. Fixed effects, random effects and pooled estimates were tested while the Hausman test was used to determine the best fit. From the fixed effect result the estimated regression model found that the independent variables can explain 79.2% and 63.8% variation on return on equity of the commercial banks. The F statistics proved that the model is statistically significant. The ? coefficient proved that risk management and liquidity reserves have negative effect on return on equity of the commercial banks while credit allocation and deposit mobilization have positive effect on return on equity of the commercial banks. From the findings, the study concludes that credit allocation does not significantly affect the return on equity of deposit money banks in Nigeria. That deposit mobilization has significantly affected the return on equity of deposit money banks in Nigeria. That liquidity reserves have significantly affect the return on equity of deposit money banks in Nigeria and that risk management have significantly affect the return on equity of deposit money banks in Nigeria. The study recommends that commercial banks managements should ensure that all the staff is properly trained to manage banking functions and transactions to achieve effective banking that enhances performance of the banking institutions.

Keywords

Bank FunctionsFinancial PerformanceCommercial BanksNigeria.

References

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Bank Functions and Financial Performance of Quoted Commercial Banks in Nigeria

Abstract

Keywords

References

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