International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online
The purpose of this research was to empirically investigate the effect of capital structure on financial sustainability
of deposit-taking micro finance institutions (DTMs) in Kenya. The specific objectives were to determine the impact
of debt on the financial sustainability of DTMs in Kenya, to assess the influence of retained earnings on the financial
sustainability of DTMs in Kenya, to examine the effect of ordinary share capital on the financial sustainability of
MFIs in Kenya, and to investigate the impact of preferred share capital on the financial sustainability of DTMs in
Kenya. The target population of the study was all the 13 DTMs in Kenya registered with the Central Bank of Kenya.
Secondary data was collected on all the DTMs financial data from the Central Bank of Kenya reports. Data was
analyzed using multiple regression model using SPSS and R as the data analysis tool. Based on the findings 76.9%
of the DTMs did not earn enough revenue to cover the actual financing direct costs, which include the total operating
costs, loan loss provisions and the financing costs but excluding the cost of capital. The analysis of variance
(ANOVA) table indicated that the predictor variables influenced the predictor variable significantly at 5%
significance level. Among the four variables; debt and retained earnings were statistically significant variable at 5%
significance level with 1.265 and 1.630 coefficient respectfully. Whereby the financial sustainability change by
1.265 and 1.630 for every unit change of debt or retained earnings respectfully. Therefore, for the deposit-taking
microfinance institutions to remain afloat in the lending business, they should utilize any borrowing opportunity,
plough back profits to the business, and low proportion of preferred share capital. Deposit-taking microfinance
institutions should avoid usage ordinary share capital as it negatively affected financial sustainability
Capital Structure andCorporate Governance practices. Evidence from Listed Non...IOSR Journals
This paper examines the impact of corporate governance on capital structure for firms listed on NSE Kenya. The total population of non-financial firms is 50.A sample of 30 companies whose data for 5 years from 2007-2011 was selected. The study uses five corporate governance proxies: Board size (BS), Ownership concentration (ONC), Institutional share ratio (ISR), CEO duality (CED), Board independence (BI) as independent variables. Four capital structures variables are: Long term debt to asset ratio (LTDA), Short term debt to asset ratio (STDA), Debt equity ratio (DE), and Total debt to asset ratio (TD) as dependent variables. The analysis used both descriptive and inferential analysis where correlation and linear regression were used.An average of 7 directors are on the board of firms with 93% of firms CEO doubling as a director.Using model 1 regression equation positive correlation is shown between TD with corporate governance proxies CED which is significant at 95% significant level. Using model 2 regression equation size of the firmSz taken as natural logarithm of sales as a moderating variable CED is negatively correlated to STD and DE and is significant implying firms tend to adopt pecking order theory to avoid more debt
Corporate governance is of great importance for financial performance. Corporate governance issues have attracted public interest in the financial sector both locally and internationally after waves of corporate rip-offs and failures that almost led to loss of confidence in the finance sector. The general objective of this study was to determine the effect of corporate governance on financial performance of Savings and Credit Co-operatives in Kenya. The study adopted a descriptive research design. The study targeted a population of 65 active Savings and credit Co-operatives operating in Embu County. A sample size of 57 Savings and Credit Co-operatives was used in this study. Stratified sampling technique was used to select the sample. Primary data was collected using self-administered semi-structured questionnaires while secondary data was obtained from financial statements and periodicals using a record survey sheet. Pre-testing of research tool was conducted before the actual data collection was carried, to determine the reliability of the questionnaire by use of a Cronbach‘s alpha, statistical coefficient, while the validity was tested to ensure that the questions in the questionnaire provides adequate coverage to the investigative questions. Correlation and multiple regression analysis was used to establish the relationship between independent and dependent variables. The study findings indicated that corporate governance positively affected the financial performance. In specific the board composition and corporate risk management for SACCOs had a positive effect on the financial performances of the SACCOs. The study is beneficial to SACCOs management in improving the performance of Savings and Credit Co-operatives and enabling them to compete globally. The study recommends gender parity consideration and balanced mix of skilled board members during appointments of the board members. The recommendations are important to the government, especially the department of cooperatives in strengthening policies regarding cooperative societies.
The Effect of Capital Structure on Firm Performance: Empirical Evidence from ...inventionjournals
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
Relevance of Mergers and Acquisition on Financial Performance of Deposit Mone...iosrjce
The paper examined the effects of Merger and Acquisition on the financial performance of selected
deposit money banks in Nigeria with emphasis on Profit After Tax, Gross Earnings and Asset Growth as
financial efficiency parameters. Two Nigeria Deposit Money Bank were selected using convenience and
judgemental sample selection methods. Data were collected from the published financial statements of the banks
namely former Oceanic bank and Ecobank Plc (now Ecobank Plc) and former Intercontinental Bank Plc and
Access Bank (Access Bank Plc). Data were analyzed using Linear Regression statistical tool. The results
revealed that Post Merger Financial Performance was significantly improved than the Pre Merger period of the
banks. The study therefore recommends that banks can merge or acquire each other as this has proved to
become a plat form for rescuing ailing ones and could provides a platform that could enhance batter financial
performance
The purpose of this research was to empirically investigate the effect of capital structure on financial sustainability
of deposit-taking micro finance institutions (DTMs) in Kenya. The specific objectives were to determine the impact
of debt on the financial sustainability of DTMs in Kenya, to assess the influence of retained earnings on the financial
sustainability of DTMs in Kenya, to examine the effect of ordinary share capital on the financial sustainability of
MFIs in Kenya, and to investigate the impact of preferred share capital on the financial sustainability of DTMs in
Kenya. The target population of the study was all the 13 DTMs in Kenya registered with the Central Bank of Kenya.
Secondary data was collected on all the DTMs financial data from the Central Bank of Kenya reports. Data was
analyzed using multiple regression model using SPSS and R as the data analysis tool. Based on the findings 76.9%
of the DTMs did not earn enough revenue to cover the actual financing direct costs, which include the total operating
costs, loan loss provisions and the financing costs but excluding the cost of capital. The analysis of variance
(ANOVA) table indicated that the predictor variables influenced the predictor variable significantly at 5%
significance level. Among the four variables; debt and retained earnings were statistically significant variable at 5%
significance level with 1.265 and 1.630 coefficient respectfully. Whereby the financial sustainability change by
1.265 and 1.630 for every unit change of debt or retained earnings respectfully. Therefore, for the deposit-taking
microfinance institutions to remain afloat in the lending business, they should utilize any borrowing opportunity,
plough back profits to the business, and low proportion of preferred share capital. Deposit-taking microfinance
institutions should avoid usage ordinary share capital as it negatively affected financial sustainability
Capital Structure andCorporate Governance practices. Evidence from Listed Non...IOSR Journals
This paper examines the impact of corporate governance on capital structure for firms listed on NSE Kenya. The total population of non-financial firms is 50.A sample of 30 companies whose data for 5 years from 2007-2011 was selected. The study uses five corporate governance proxies: Board size (BS), Ownership concentration (ONC), Institutional share ratio (ISR), CEO duality (CED), Board independence (BI) as independent variables. Four capital structures variables are: Long term debt to asset ratio (LTDA), Short term debt to asset ratio (STDA), Debt equity ratio (DE), and Total debt to asset ratio (TD) as dependent variables. The analysis used both descriptive and inferential analysis where correlation and linear regression were used.An average of 7 directors are on the board of firms with 93% of firms CEO doubling as a director.Using model 1 regression equation positive correlation is shown between TD with corporate governance proxies CED which is significant at 95% significant level. Using model 2 regression equation size of the firmSz taken as natural logarithm of sales as a moderating variable CED is negatively correlated to STD and DE and is significant implying firms tend to adopt pecking order theory to avoid more debt
Corporate governance is of great importance for financial performance. Corporate governance issues have attracted public interest in the financial sector both locally and internationally after waves of corporate rip-offs and failures that almost led to loss of confidence in the finance sector. The general objective of this study was to determine the effect of corporate governance on financial performance of Savings and Credit Co-operatives in Kenya. The study adopted a descriptive research design. The study targeted a population of 65 active Savings and credit Co-operatives operating in Embu County. A sample size of 57 Savings and Credit Co-operatives was used in this study. Stratified sampling technique was used to select the sample. Primary data was collected using self-administered semi-structured questionnaires while secondary data was obtained from financial statements and periodicals using a record survey sheet. Pre-testing of research tool was conducted before the actual data collection was carried, to determine the reliability of the questionnaire by use of a Cronbach‘s alpha, statistical coefficient, while the validity was tested to ensure that the questions in the questionnaire provides adequate coverage to the investigative questions. Correlation and multiple regression analysis was used to establish the relationship between independent and dependent variables. The study findings indicated that corporate governance positively affected the financial performance. In specific the board composition and corporate risk management for SACCOs had a positive effect on the financial performances of the SACCOs. The study is beneficial to SACCOs management in improving the performance of Savings and Credit Co-operatives and enabling them to compete globally. The study recommends gender parity consideration and balanced mix of skilled board members during appointments of the board members. The recommendations are important to the government, especially the department of cooperatives in strengthening policies regarding cooperative societies.
The Effect of Capital Structure on Firm Performance: Empirical Evidence from ...inventionjournals
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
Relevance of Mergers and Acquisition on Financial Performance of Deposit Mone...iosrjce
The paper examined the effects of Merger and Acquisition on the financial performance of selected
deposit money banks in Nigeria with emphasis on Profit After Tax, Gross Earnings and Asset Growth as
financial efficiency parameters. Two Nigeria Deposit Money Bank were selected using convenience and
judgemental sample selection methods. Data were collected from the published financial statements of the banks
namely former Oceanic bank and Ecobank Plc (now Ecobank Plc) and former Intercontinental Bank Plc and
Access Bank (Access Bank Plc). Data were analyzed using Linear Regression statistical tool. The results
revealed that Post Merger Financial Performance was significantly improved than the Pre Merger period of the
banks. The study therefore recommends that banks can merge or acquire each other as this has proved to
become a plat form for rescuing ailing ones and could provides a platform that could enhance batter financial
performance
International Journal of Business and Management Invention (IJBMI)inventionjournals
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
DOES BOARD NATIONALITY INFLUENCE THE RETURN ON EQUITY OF MONEY DEPOSIT BANKS?...IAEME Publication
This study examines the influence of board nationality on the return on equity of
money deposits banks in Nigeria. This study makes use of econometric procedure and
data was collected through a secondary source of information. The population of
interest for the study comprised the twenty-two deposit money banks listed on the
Nigerian Stock Exchange (NSE) and the sample size consists of nine selected money
deposit banks which were purposively chosen based on the consistency in their
publication of their financial account up to 2016; and as well based on their equity.
The finding shows that the board nationality brings diverse experience and expertise
to bear on the operations of banks and it has a significant positive effect on the ROE
of the selected banks. It is therefore recommended that the money banks in Nigeria
should infuse more independent non-executive directors in the board to acts as checks
on the excesses of the executive directors and to counter-balance the influence of the
executive directors on the management. Further, the study also advised that more
foreign directors should be elected on the board of deposit money banks in Nigeria as
more foreigners on the board provide a large stock of qualified candidates with
broader experience and diverse expertise which the domestic members may not
possess.
Corporate Governance on Earnings Management in Listed Deposit Money Bank in N...ijtsrd
The increase in the manipulation of accounting records and collapse of some Nigerian Deposit Money Banks have left question in the mind of researchers on the role of corporate governance. This paper was carried out to examine the impact of corporate governance attributes on earnings management of listed Deposit Money Banks from 2009 to 2017. The study used a sample size of thirteen 13 banks. The dependent variable was measured using Discretionary Loan Loss Provision Model by Chang, Shen and Fang 2008 . Correlational design was employed the secondary data was obtained from the annual reports of the firms and Nigerian Stock Exchange website. The results from the multiple regression analysis proved that board size has positive and significant impact on earnings management board independence has negative and significant impact on earnings management while board of directors' ownership has insignificant impact on earnings management. The study concludes that effective monitoring role of independence directors will constrain the opportunistic behavior by managers. The paper therefore recommends among others that banks should increase the numbers of independent directors on the board to improve their monitoring effectiveness. Olaleye John Olatunde | Amafa Etupu Oluwafunmilayo "Corporate Governance on Earnings Management in Listed Deposit Money Bank in Nigeria" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-4 | Issue-1 , December 2019, URL: https://www.ijtsrd.com/papers/ijtsrd29515.pdfPaper URL: https://www.ijtsrd.com/management/other/29515/corporate-governance-on-earnings-management-in-listed-deposit-money-bank-in-nigeria/olaleye-john-olatunde
mpact of Foreign Shares to Profitability in Turkish Participation Banksinventionjournals
Covering the period 2006 to 2015, this paper aims at empirically studying the impact of foreign shares on the profitability of participation banks. Several econometrical models have been implemented to reveal this relation among variables. There is no co-integration result between profitability on the one hand, and foreign shares, deposits, loans and equity on the other hand. According to the Granger causality test lag 1, a bidirectional relationship exists between deposits and loans. Meanwhile, a unidirectional relationship exists between profitability and foreign shares.
Econometrics Analysis of Capital Adequacy Ratios and the Impact on Profitabil...iosrjce
This paper examines the econometrics analysis of capital adequacy ratios and the impact on the
profitability of Commercial Banks in Nigeria from 1980 – 2013. The objective is to investigate whether there is
a dynamic long run relationship between capital adequacy ratios and the profitability of commercial banks.
Time series data were sourced from Stock Exchange factbook and financial statement of quoted commercial
banks and the Johansen co-integration techniques in vector error correction model setting (VECM) as well as
the granger causality test were employed. The study has Return on Asset (ROA), Return on Investment (ROI)
and Return on Equity (ROE) as the dependent variables and the independent variables are Adjusted Capital to
Risk Asset Ratio (ACRR), Capital to Deposit Ratio (CTD), Capital to Net Loans and Advances Ratio (CNLAR),
Capital to Risk Asset Ratio (CRA) and Capital to Total Asset Ratio (CTAR). The empirical result demonstrated
vividly in the models that there is a positive long run dynamic and significant relationship between return on
asset and capital to risk asset ratio and capital to deposit ratio while others are negatively correlated. The
findings also revealed that there is bi-directional causality running from ROA to ACRR and ROA to CNLAR. We
therefore recommend that financial policies should be strengthened to deepen the capital base of Nigerian
Commercial banks to enhance bank profitability and sustain economic growth.
Using panel data from firms listed on the Nairobi Securities Exchange during the period
2004-2014, this paper examines the effect of board diversity and firm performance. Specifically the study investigates the effect of independent directors, board size, gender and financial expertise of directors and firm performance. The study finds, steadily with trends in most countries, the representation of women on the corporate board remains low. Regression results indicate that board independence has a negative and significant relationship on firm performance. The study also finds that gender diverse boards perform better as measured by Return on Assets (ROA).
https://www.ijmst.com/
IJMST Volume 1 Issue 5, Manuscript 4
The research was based on the fact that an inadequate fund is the biggest problem facing the
Savings and Co-operative (SACCO) in Kenya. Basing on this, the researcher carried out a
study on how this financial shortage comes about, its influences on the operations of
SACCOs and proposed solutions for handling the problem. The researcher adopted purposive
sampling selecting a total of 37 individuals to make it into the sample population. This
method of sampling was preferred since it was suitable in selecting individuals who
possessed knowledge on the financial issues affecting SACCOs. It employed interview
guides and questionnaires as major instruments for data collection. The data collection
process was programmed to be completed in a two-week timeframe. Thereafter, data analysis
entailed scrutiny of the data with the aim of checking for the level of its accuracy. It was from
the results of data analysis that the study drew its conclusions and recommendations.
Financial mismatch negatively affect SACCO performance. There is need to ensure sound
management practices and policies for SACCOs to perform well.
International Journal of Business and Management Invention (IJBMI)inventionjournals
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
DOES BOARD NATIONALITY INFLUENCE THE RETURN ON EQUITY OF MONEY DEPOSIT BANKS?...IAEME Publication
This study examines the influence of board nationality on the return on equity of
money deposits banks in Nigeria. This study makes use of econometric procedure and
data was collected through a secondary source of information. The population of
interest for the study comprised the twenty-two deposit money banks listed on the
Nigerian Stock Exchange (NSE) and the sample size consists of nine selected money
deposit banks which were purposively chosen based on the consistency in their
publication of their financial account up to 2016; and as well based on their equity.
The finding shows that the board nationality brings diverse experience and expertise
to bear on the operations of banks and it has a significant positive effect on the ROE
of the selected banks. It is therefore recommended that the money banks in Nigeria
should infuse more independent non-executive directors in the board to acts as checks
on the excesses of the executive directors and to counter-balance the influence of the
executive directors on the management. Further, the study also advised that more
foreign directors should be elected on the board of deposit money banks in Nigeria as
more foreigners on the board provide a large stock of qualified candidates with
broader experience and diverse expertise which the domestic members may not
possess.
Corporate Governance on Earnings Management in Listed Deposit Money Bank in N...ijtsrd
The increase in the manipulation of accounting records and collapse of some Nigerian Deposit Money Banks have left question in the mind of researchers on the role of corporate governance. This paper was carried out to examine the impact of corporate governance attributes on earnings management of listed Deposit Money Banks from 2009 to 2017. The study used a sample size of thirteen 13 banks. The dependent variable was measured using Discretionary Loan Loss Provision Model by Chang, Shen and Fang 2008 . Correlational design was employed the secondary data was obtained from the annual reports of the firms and Nigerian Stock Exchange website. The results from the multiple regression analysis proved that board size has positive and significant impact on earnings management board independence has negative and significant impact on earnings management while board of directors' ownership has insignificant impact on earnings management. The study concludes that effective monitoring role of independence directors will constrain the opportunistic behavior by managers. The paper therefore recommends among others that banks should increase the numbers of independent directors on the board to improve their monitoring effectiveness. Olaleye John Olatunde | Amafa Etupu Oluwafunmilayo "Corporate Governance on Earnings Management in Listed Deposit Money Bank in Nigeria" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-4 | Issue-1 , December 2019, URL: https://www.ijtsrd.com/papers/ijtsrd29515.pdfPaper URL: https://www.ijtsrd.com/management/other/29515/corporate-governance-on-earnings-management-in-listed-deposit-money-bank-in-nigeria/olaleye-john-olatunde
mpact of Foreign Shares to Profitability in Turkish Participation Banksinventionjournals
Covering the period 2006 to 2015, this paper aims at empirically studying the impact of foreign shares on the profitability of participation banks. Several econometrical models have been implemented to reveal this relation among variables. There is no co-integration result between profitability on the one hand, and foreign shares, deposits, loans and equity on the other hand. According to the Granger causality test lag 1, a bidirectional relationship exists between deposits and loans. Meanwhile, a unidirectional relationship exists between profitability and foreign shares.
Econometrics Analysis of Capital Adequacy Ratios and the Impact on Profitabil...iosrjce
This paper examines the econometrics analysis of capital adequacy ratios and the impact on the
profitability of Commercial Banks in Nigeria from 1980 – 2013. The objective is to investigate whether there is
a dynamic long run relationship between capital adequacy ratios and the profitability of commercial banks.
Time series data were sourced from Stock Exchange factbook and financial statement of quoted commercial
banks and the Johansen co-integration techniques in vector error correction model setting (VECM) as well as
the granger causality test were employed. The study has Return on Asset (ROA), Return on Investment (ROI)
and Return on Equity (ROE) as the dependent variables and the independent variables are Adjusted Capital to
Risk Asset Ratio (ACRR), Capital to Deposit Ratio (CTD), Capital to Net Loans and Advances Ratio (CNLAR),
Capital to Risk Asset Ratio (CRA) and Capital to Total Asset Ratio (CTAR). The empirical result demonstrated
vividly in the models that there is a positive long run dynamic and significant relationship between return on
asset and capital to risk asset ratio and capital to deposit ratio while others are negatively correlated. The
findings also revealed that there is bi-directional causality running from ROA to ACRR and ROA to CNLAR. We
therefore recommend that financial policies should be strengthened to deepen the capital base of Nigerian
Commercial banks to enhance bank profitability and sustain economic growth.
Using panel data from firms listed on the Nairobi Securities Exchange during the period
2004-2014, this paper examines the effect of board diversity and firm performance. Specifically the study investigates the effect of independent directors, board size, gender and financial expertise of directors and firm performance. The study finds, steadily with trends in most countries, the representation of women on the corporate board remains low. Regression results indicate that board independence has a negative and significant relationship on firm performance. The study also finds that gender diverse boards perform better as measured by Return on Assets (ROA).
https://www.ijmst.com/
IJMST Volume 1 Issue 5, Manuscript 4
The research was based on the fact that an inadequate fund is the biggest problem facing the
Savings and Co-operative (SACCO) in Kenya. Basing on this, the researcher carried out a
study on how this financial shortage comes about, its influences on the operations of
SACCOs and proposed solutions for handling the problem. The researcher adopted purposive
sampling selecting a total of 37 individuals to make it into the sample population. This
method of sampling was preferred since it was suitable in selecting individuals who
possessed knowledge on the financial issues affecting SACCOs. It employed interview
guides and questionnaires as major instruments for data collection. The data collection
process was programmed to be completed in a two-week timeframe. Thereafter, data analysis
entailed scrutiny of the data with the aim of checking for the level of its accuracy. It was from
the results of data analysis that the study drew its conclusions and recommendations.
Financial mismatch negatively affect SACCO performance. There is need to ensure sound
management practices and policies for SACCOs to perform well.
This research work investigated the influence of firm size on the financial performance of deposit money banks quoted on the Nigerian stock exchange. The research work is necessitated by the need to find the factors that respond positively or negatively to the financial performance of deposit money banks in Nigeria. Five deposit money banks were sampled with the aid of Taro Yemeni sampling technique to represent the entire banking industry in Nigeria. The firm size proxied by log of total assets represents the explanatory variable while the financial performance measured by profitability proxied by return on asset is the dependent variable. The analysis was conducted using the pooled OLS regression and fixed effect/random effect regression with the aid of STATA for panel regression. In addition, descriptive statistics and correlation analysis were computed. The finding of the study indicates that firm size insignificantly negatively influenced financial performance as a result of diseconomies of scale. The study therefore recommends that the industry should minimize the cost of expansion and enjoy maximum benefits of economies of scale in addition to other factors that may stimulate financial performance should be considered instead of the firm size that indicate insignificantly negative effect.
Characteristics of Nigerian Deposit Money Banks and Their Financial Outcomeijtsrd
The purpose of this research was to examine the connections between DMB profitability and various company characteristics in Nigeria. This study used panel data regression to evaluate five hypotheses on how market share, liquidity, credit risk, interest rate spread, and leverage affect bank profitability. Secondary data was gathered from the financial statements of the 19 deposit money banks listed on the international and local markets of the Nigerian Stock Exchange NSE between 2012 and 2021. The success of Nigerian banks is strongly influenced by their market share, liquidity, interest rate spread, and leverage. There was a connection between credit risk and ROA, however it was weak and not statistically significant. The report recommended that the Central Bank of Nigeria CBN create policies to enable banks increase their market share, rather than seeking to limit the number of firms in the banking sector. Dr. Confidence J. Ihenyen | Okpobo, Timinipre Joseph | Monron, Ezekiel Lawrence "Characteristics of Nigerian Deposit Money Banks and Their Financial Outcome" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-7 | Issue-3 , June 2023, URL: https://www.ijtsrd.com.com/papers/ijtsrd56303.pdf Paper URL: https://www.ijtsrd.com.com/management/accounting-and-finance/56303/characteristics-of-nigerian-deposit-money-banks-and-their-financial-outcome/dr-confidence-j-ihenyen
The Implication of Corporate Governance on Financial Institution’s Performanc...Waqas Tariq
Application of business ethics is sine qua non to the concept of corporate governance. Corporate governance on it own has a very significant relationship with corporate performance. This is the thrust of this paper. The Central Bank of Nigeria (CBN) bulletin of (2006) had asserted that disagreement between the board and management of financial institutions usually gives rise to board squabbles and ineffective board oversight functions. This is why the objective of this article is to determine the extent to which corporate governance practices impacts on financial institutions performance. To validate this assertion, a sample of thirty three financial institution listed on the Nigerian stock Exchange from 2004 to 2008 was used for this study. Multiple regressions Analysis and ordinary least square (OLS) method of estimation were applied. The results showed that there is a positive correlation between corporate governance practices and firms” performance. The other two performance proxies that is, Return on Equity and two corporate governance practices namely; the firms’ board size and audit committee also showed positive relationship. However, there was a negative relationship between the net profit margin, the firms’ board size and audit committee. The study could not establish a relationship between the two performance variables, namely; Return on Equity and Net profit Margin, and the executive officers’ status. In conclusion, the findings in this study are consistent with the findings of studies conducted in other countries that business ethics and good governance practices are the bed rock of optimum. It is recommended that corporate governance mechanisms be objectively structured to enhance optimal performance of corporate institutions in Nigeria.
Determinants of Banks’ Financial Performance: A Comparative Study between Nat...inventionjournals
Financial performance is one of the most critical factors having impact on the decision making of the resource providers. And thus to ensure the existence in the ever growing competitive business environment, every institution should be more concerned about the factors affecting their financial performance. This paper specially focuses on identifying the factors having impact on the financial performance of the commercial banks operating in Bangladesh. An effort has also been exerted to determine whether the extent of influence of various factors on financial performance varies with respect to local private and nationalized commercial banks. For this purpose 10 local private commercial banks (PCB) and all nationalized commercial banks (NCB) have been taken covering the period from 2008-2014. Here, data has been collected from the annual reports of the banks under consideration. To draw conclusion a multiple regression has been run by considering financial performance (profitability) as dependent variable and operating efficiency, asset utilization , liquidity, credit risk, capital adequacy and size of the company as independent variables. The study finds that asset utilization and operating efficiency have significant positive impact on banks' financial performance (profitability) whereas credit risk has significant negative impact. However, for PCBs asset utilization is the most critical factor to performance. On the other hand, result shows that in case of NCB 1 taka increase in credit risk is responsible for negative return of 0.968 taka. It is found that financial performance has no significant relationship with size and liquidity of the banks
Boards of Directors are not only expected to monitor a company management; they are also held
responsible for an organization’s failure to attain organizational performance goals.The purpose of this study
was to establish the relationship between board of directors’ composition, strategic leadership and performance
of commercial banks in Kenya. The specific objectives were to establish the relationship betweenboard size,
non-executive directors, and board diversityand performance of commercial banks in Kenya and the extent to
which strategic leadership moderates such relationships
A Comparative Analysis of Capital Structure between Banking and Non-Banking F...iosrjce
This research aims to compare the capital structure of Bangladeshi banking and non-banking
financial institutions through some measurements. The annual financial statements of 10 commercial banks and
10 non-bank financial institutions were used for this study which covers a period of five (5) years from 2009-
2013. The study assesses the capital structure of the banking and non-banking sectors measured by total debt
to equity ratio (DER), total debt to total funds ratio and performance by ROE, ROA, EPS.Descriptive statistics,
t-test have been used to show the differences between banking and non-banking capital structure and
performance. However this study concludes that there is no significant difference between Bank and non-bank’s
EPS but there is a significant difference between Bank and non-bank’s D/A ratio and D/E ratio and ROA and
ROE.
The profitability of commercial banks is influenced by a number of internal and external factors. This paper attempts to identify the internal factors which significantly influence the profitability of commercial banks in Bangladesh. In this study, profitability is measured by ROA and ROE which may be significantly influenced by the internal factors such as IRS, NIM, CAR, CR, DG, LD, CTI and SIZE of the bank. Data are collected from published annual reports during 2014--2018 of 23 commercial banks. Using simple regression model, it is found that CR has significant effect on the profitability and CAR has significant influence on ROA only. In addition to this, DG has significant effects on PCBs’ profitability (ROE only) where as IRS and CTI have significant influence on profitability (ROA only) of ICBs. Further, none of these variables have significant effects on the profitability of SCBs but CAR and CR are correlated with profitability (ROA only) and the causes may be the nature of services provided by SCBs to its clients. The internal policy makers should manage the influential internal factors of the banks in order to increase their profitability so that they can meet stakeholders’ expectations.
International Journal of Business and Management Invention (IJBMI)inventionjournals
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online
Corporate debt policy remained a significant, but a challenging decision for managers entrusted with the responsibility to improve the value of the firm. Thus, this study examines the factors influencing the capital structure decisions of firms in Nigeria. The study employs a panel data regression model to analyze data from firms in Nigeria for the period 2011 to 2015. The result of the empirical analysis reveals that firms in Nigeria have a preference to finance economic operations from retained earnings and the use of short-term debt on rollover basis. The finding of this study confirms that debt decreases with profitability and growth opportunities. The findings show that asset tangibility and firm size have a positive and significant relationship with debt policy of firms in Nigeria. The analysis also reveals that managerial ownership has a negative and significant relationship with debt ratio of firms in Nigeria. The study shows a non-significant positive relationship between non-debt tax shields and debt. The study demonstrates that the trade-off and pecking order theories both explains the factors influencing capital structure decisions of firms in Nigeria. Therefore, this study suggests the need for stakeholders to develop the financial markets and make it accessible for firms to obtain long-term financing for economic growth and development.
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The European Unemployment Puzzle: implications from population agingGRAPE
We study the link between the evolving age structure of the working population and unemployment. We build a large new Keynesian OLG model with a realistic age structure, labor market frictions, sticky prices, and aggregate shocks. Once calibrated to the European economy, we quantify the extent to which demographic changes over the last three decades have contributed to the decline of the unemployment rate. Our findings yield important implications for the future evolution of unemployment given the anticipated further aging of the working population in Europe. We also quantify the implications for optimal monetary policy: lowering inflation volatility becomes less costly in terms of GDP and unemployment volatility, which hints that optimal monetary policy may be more hawkish in an aging society. Finally, our results also propose a partial reversal of the European-US unemployment puzzle due to the fact that the share of young workers is expected to remain robust in the US.
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US Economic Outlook - Being Decided - M Capital Group August 2021.pdfpchutichetpong
The U.S. economy is continuing its impressive recovery from the COVID-19 pandemic and not slowing down despite re-occurring bumps. The U.S. savings rate reached its highest ever recorded level at 34% in April 2020 and Americans seem ready to spend. The sectors that had been hurt the most by the pandemic specifically reduced consumer spending, like retail, leisure, hospitality, and travel, are now experiencing massive growth in revenue and job openings.
Could this growth lead to a “Roaring Twenties”? As quickly as the U.S. economy contracted, experiencing a 9.1% drop in economic output relative to the business cycle in Q2 2020, the largest in recorded history, it has rebounded beyond expectations. This surprising growth seems to be fueled by the U.S. government’s aggressive fiscal and monetary policies, and an increase in consumer spending as mobility restrictions are lifted. Unemployment rates between June 2020 and June 2021 decreased by 5.2%, while the demand for labor is increasing, coupled with increasing wages to incentivize Americans to rejoin the labor force. Schools and businesses are expected to fully reopen soon. In parallel, vaccination rates across the country and the world continue to rise, with full vaccination rates of 50% and 14.8% respectively.
However, it is not completely smooth sailing from here. According to M Capital Group, the main risks that threaten the continued growth of the U.S. economy are inflation, unsettled trade relations, and another wave of Covid-19 mutations that could shut down the world again. Have we learned from the past year of COVID-19 and adapted our economy accordingly?
“In order for the U.S. economy to continue growing, whether there is another wave or not, the U.S. needs to focus on diversifying supply chains, supporting business investment, and maintaining consumer spending,” says Grace Feeley, a research analyst at M Capital Group.
While the economic indicators are positive, the risks are coming closer to manifesting and threatening such growth. The new variants spreading throughout the world, Delta, Lambda, and Gamma, are vaccine-resistant and muddy the predictions made about the economy and health of the country. These variants bring back the feeling of uncertainty that has wreaked havoc not only on the stock market but the mindset of people around the world. MCG provides unique insight on how to mitigate these risks to possibly ensure a bright economic future.
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Pi coins is not launched yet in any exchange 💱 this means it's not swappable, the current pi displaying on coin market cap is the iou version of pi. And you can learn all about that on my previous post.
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Empowering the Unbanked: The Vital Role of NBFCs in Promoting Financial Inclu...Vighnesh Shashtri
In India, financial inclusion remains a critical challenge, with a significant portion of the population still unbanked. Non-Banking Financial Companies (NBFCs) have emerged as key players in bridging this gap by providing financial services to those often overlooked by traditional banking institutions. This article delves into how NBFCs are fostering financial inclusion and empowering the unbanked.
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@Pi_vendor_247
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International Journal of Business and Management Invention (IJBMI)
1. International Journal of Business and Management Invention
ISSN (Online): 2319 – 8028, ISSN (Print): 2319 – 801X
www.ijbmi.org Volume 2 Issue 7ǁ July. 2013ǁ PP.12-16
www.ijbmi.org 12 | P a g e
An Exploration of the Impact of Corporate Governance on Bank
Performance in Nigeria 2006-2010
Omoniyi, B.O1,
Ajayi, C.F.2,
Kekereowo, I.O3.
1
Department of Economics, College of Education, Ikere-Ekiti, Ekitit State. Nigeria.
2
Department of Economics, College of Education, Ikere-Ekiti, Ekitit State. Nigeria.
3
Department of Economics, College of Education, Ikere-Ekiti, Ekitit State. Nigeria.
ABSTRACT: The paper assessed the impact of corporate governance on bank performance in Nigeria .The
study which used15 banks as case study covers period 2006-2010. Capital adequacy ratio (CAR) and loan
deposit ratio (LDR) were used as proxies for corporate governance while earning per share (EPS), return on
capital employed (ROCE) and return on equity (ROE) were used as proxies for bank performance. The study
adopted ordinary least square estimating techniques as its method of analysis. Findings from the empirical
result show that high (CAR) has the tendency of improving bank performance while high (LDR) has the
tendency of reducing bank performance. The overall test of statistical significance shows that corporate
governance does not have significant impact on the bank performance in Nigeria. The policy recommendation is
that monetary authorities should improve on monitoring and supervision in relation to corporate governance in
the Nigeria banking sector since findings have revealed that corporate performance has not played the expected
role in improving bank performance in Nigeria.
KEY WORDS: Capital Adequacy Ratio, Loan Deposit Ratio, Corporate Performance, Bank Performance.
I. INTRODUCTION
Corporate governance research has been increasingly popular in recent years. Especially from the
recent trend of events in the banking sector in Nigeria. This ranges from, recapitalization era to the global
financial crisis and now to non performing loan crisis which According to the Enron (2008) is a reflection of
poor corporate governance. Corporate governance is considered as one of the most critical factors influencing
firm performance. Corporate governance in the banking sector is particularly important. This is because the
banking sector plays a special role in the economic system as it facilitates capital allocations and the risk
management of the business. Thus, the corporate governance arrangements of banks are very important for the
business of the banks and their business customers.
The banking sector of the Nigerian Economy plays a major role in the countries economic
development. but over the years the sector has been bedeviled with different sorts of problems that has
transformed to overall colossal set back for other sectors in the economy. Adekanye [1986]. The Nigeria
Banking Sector has practically undergone different phases of developmental stages that have significantly
affected the performance of the sector. However, most of these phases are characterized by the need to solve
one problem or the other currently existing in the banking industry at that particular period. Sanusi [1997].
According to Odoko [2002], The problems confronting the Nigerian banking sector are multi- faceted,
he stated some of them as [i] Weak corporate governance, [ii] Indiscipline in ensuring banking soundness by
late or non publication of annual accounts and submitting them to the apex regulating authority for scrutiny.
[iii]Gross insider abuses.[Iv]Insolvency [v]Weak capital base.[vi] Over dependency on public sector deposit,
and [vii] Neglect of small and medium class savers. All these problems have been coming with the Nigerian
Banking Sector over the years, it spanned through periods before 1960 when the economy was unregulated but
still under the colonial government, to the period between 1960 and 1984 when the economy was regulated,
uptill the period the country adopted Structural Adjustment Programme in 1985 [SAP], this year marks the
beginning of the regulation in the Nigerian economy. Nnanna [2002]. The adoption of SAP in 1985 brought
with it so many challenges for the Nigerian banking sector, some of these challenges are globalization of
supervisory and prudential requirements that conform to international standards. All these challenges coupled
with the regulation of the financial sector have led to so many remarkable changes in the Nigerian banking
system over the years. The changes were characterized by number of financial institutions, ownership structure,
as well as depth and breadth of operations.
However, for the past five years in the Nigerian banking sector attention of the monetary authorities
have shifted more to the issue of corporate governance this was the aftermath of recent stunning revelations in
the Nigerian banking industry whch has led to the sacking of MDs and CEO of some major banks. All these
happenings have raised questions about the effectiveness of corporate governance in the effective running of the
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Nigerian banking sector. Soludo (2002) emphasized good corporate governance as a major way of curbing
myriads of problem confronting the Nigerian Banking sector Consequently, this paper among others will verify
this assertion by exploring corporate governance role in improving bank performance in Nigeria from 2006 till
2010.
II. SOME LITERATURE
The purpose of corporate governance is to coordinate a conflict of interests among all parties'
relationship within the company and to develop a system that can reduce or eliminate the agency problems
(OECD, 1997). It argues that the agency problems become more critical with weak governance and limited
protection of minority shareholders in a company (Dharwadkar, George, & Brandes, 2000). OECD (1997) also
outlines that sound corporate governance should be able to help the board of directors and managers to achieve
the best interests of the company and shareholders. Moreover, it can be argued that firm performance can be
improved with better corporate governance controls in a company.
Famma and Jensen (1983) argued that corporate governance does affect firm performance. They found
that the majority of larger firms with stronger governance controls are rewarded over the long-term. Klein,
Shapiro, and Young (2004) examined the relationship between corporate governance and firm value by using
the Corporate Governance Index (CGI) and Tobin's Q, which measures the firm's value. The results conclude
that corporate governance does matter in firm value.
In addition, Carse (2000) argued that a strong corporate governance standard is particularly important
for banks. This is because most of funds that banks use for business belong to their creditors and depositors. The
failure of a bank will affect not only its own shareholders, but have a systemic affect on other banks. Therefore,
it is important to ensure that banks are operating properly. Carse also stated that the corporate governance of
banks in Hong Kong is at a good standard due to the fact that the Hong Kong Monetary Authority has set out
strict guideline in relation to corporate governance for banks. On the other hand, a large number of studies have
investigated the relationship between ownership structure and firm performance. Morck, Shleifer, and Vishny
(1998) argued that higher ownership concentration has a positive impact on firm performance, because it
increases the ability of shareholders to properly monitoring managers. Shleifer and Vishney (1986) also argued
that higher level of block-holder is likely to have a positive effect on firm value. The large shareholders can
work effectively for monitoring managers in order to prevent the potential takeover threat. Based on the
corporate governance structure, the board of directors will be the supreme policy maker in a company, so the
relationship between structure of board composition and firm performance is extremely close. As we know
board composition is part of the corporate governance, so our research takes a step forward to evaluate the
relationship between board composition and firm performance.
III. METHODOLOGY
This paper evaluates the impact of corporate gorvarnabnce on the bank performance of some selected
15 banks in Nigeria. The research method adopted follows the work of cordeiro and veliyath(2003) and that of
Christopher (2009). According to the both corporate gorvanance can be internal or external. They identified
Board of size of directors and level of loan to related party as major measurement of corporate performance,
while return on asset (ROA), return om equity(ROE) and return on capital employed(ROCE) were identified as
measures of bank performance. But Denis (2001) identified capital adequacy ratio (CAR) as the major proxy for
corporate governance because it represents the degree of banks obedient function toward rules which serve to
protect public interest. Konishi and Yasuda (2004) also supported this view and asserted that implementation of
capital adequacy requirement reduces risk taking of banks. However they added that loan deposit ratio (LDR) is
another good proxy for corporate governance. Following the work of these people our model expressing bank
performance as a function of corporate performance is hereby formulated
IV. MODEL SPECIFICATION
i.e Bank performance=f( Corporate performance)
Bank performance is measured by the following: Earning per share, return om equity(ROE) and return on
capital employed(ROCE) while corporate performance is measured by capital adequacy ratio (CAR) and loan
deposit ratio (LDR). In our paper interest rate (IR) is used as our control variable. Thus, this led to formulation
of three separate models each representing a measure of bank performance. i.e
Model I
EPS=β0 + β1 CAR+ β2 LDR+ β3 IR+ β4 +Ui
Model II
ROCE=α0 + α1 CAR+ α2 LDR+ α3 IR+ α4 +Uii
Model III
3. An Exploration of The Impact of Corporate…
www.ijbmi.org 14 | P a g e
ROE=∂0 + ∂1 CAR+ ∂2 LDR+ ∂3 IR+ ∂4 +Uiii
Where: CAR= Capital adequacy ratio
EPS= Earning per share.
ROCE= Return on Capital Employed
ROE= Return on Equity
LDR= Loan Deposit Ratio
IR= Interest Rate
Ui-iii= Stochastic variables.
Β, α and ∂ are regression parameters.
Variable Definition
Dependent Variables (Measures of Bank performance)
Earning per Share (EPS): This is a measure of profitability of the common shareholders investment
Pandey(1993). It is calculated by dividing the profit after tax by the total number of commom share outstanding,
It is used as a proxy for bank performance in our paper.
That is EPS= Profit After Tax
Number of common share outstanding
Return on Capital Employed (ROCE): This ratio also relates profit to invest ment. It is computed by dividing the
profit before investment and tax by the capital employed (Total long term Fund) which is the fund employed in
the net asset plus total debt Anao and Osaze (1993). That is
ROCE= Net Profit Before Interest and Taxes
Total Long Term Fund
Return on Equity (ROE): this is the summary measure of the overall firm performance Van Horne and
Wachowicz (1993) It indicates how well the firm has used the resources of owners as it measures the
profitability of the owners investment. It is calculated by dividing the Profit after tax which reperesent share
holder’s equity or net worth which include common share capital, share premium and reserves and surplus less
accumulated losses. That is
ROE= Profit After Tax
Shareholder’s Equity or Net Worth
Independent Variables (Measures of Corporate Governance)
Capital Adequacy Ratio (CAR): This is capital divided by the risk –weighted average assets. Capital
included in CAR comprises of both secondary and main capital. Central bank determines that banks should
reserve minimum level of CAR at least 8%. The CAR number represents the degree of banks obedient to
function toward the rules which serves to protect public interest. Lerger CAR number represents higher bank
sensitivity toward public interest Christopher (2009) That is
CAR= Total Capital
Risk –weighted average assets
Loan Deposit Ratio (LDR): Loan is represented by total loan on the balance sheet, while deposit
include demand deposit, time deposit, certificate of deposit, savings, issued securities, prime capital, loan capital
and borrowing. This ratio shows the proportion of public contribution as source of capital to finance the banks’
loans. Smaller LDR number indicates that public provides smaller proportion to support the banks’ loans. In
addition central bank determines that bank concern the level of LDR to be lower than 85%. Smaller LDR
number suggests that banks attempt to maintain obedient function toward the rules which serves to protect
public interest. Hence is a good proxy for corporate governance. Christopher (2009). That is
LDR= Total Loan
Total Deposits
Interest Rate (IR): this is the cost of borrowing or the reward of capital. It is used as control
variable.
4. An Exploration of The Impact of Corporate…
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Estimating Technique
The ordinary least square (O L S ) method of multiple regression on is used in the estimation process.
This is because the OLS appears appropriate as it yields estimator which are best linear, unbiased and efficient.
The average values of the variable as it related to the 15 banks were used in the regression analysis.
V. RESULTS AND DISCUSSION.
The estimated regression models are presented as follows:
Model I
EPS=31.14+259.7CAR-47.19LDR-4.07IR
(30.30)* (166.07)* (29.66)* (1.62)*
R2
= 0.88, F(3,!) 2.52 (0.427)
D.W=1.77
Model II
ROCE=-6.93+203.3CAR-62.73LDR-2.98IR
(74.45)* (408.08)* (72.88)* (3.98)*
R2
= 0.81, F(3,!) 1.419 (0.535)
D.W=1.71
Model III
ROE=-20.90+402.93CAR-31.25LDR-5.44IR
(151.49)* (830.24)* (148.28)* (8.10)*
R2
= 0.56, F(3,!) 0.423 (0.7781)
D.W=1.75
The first model expresses the empirical relationship between earning per share as a measure of bank
performance and variables of corporate governance. The result showed that there is a direct relationship between
capital adequacy ratio (CAR) as a core measure of corporate performance in our model and the earning per
share. This is in line with the findings of konishi and Yasuda (2004) that higher CAR will aid bank performance.
They emphasized that higher CAR normally promote public confidence in the stability of a bank hence tendency
for the bank to enjoy more patronage from the public.. However Model II and Model III also show the same
relationship between ROCE,ROE and CAR respectively. Therefore as capital adequacy ratio rises(higher bank
sensitivity toward public interest) the earning per share EPS, return on capital employed ROCE and return on
equity ROE will also rise. However, another feature from our result that is common to all the models is that
none of the parameter estimates of the CAR in the three model is statistically significant. This means that CAR
does not have significant impact on the EPS, ROCE and ROE.
Secondly, in all the three models, LDR demonstrated inverse relationship with the EPS, ROCE and
ROE respectively. According to Christopher (2009) Smaller LDR number suggests that banks attempt to
maintain obedient function toward the rules which serves to protect public interest. From our result it has shown
that banks in Nigeria that attempt to keep high LDR which is against good ethics of corporate governance will
have negative effect on bank performance.. This account for the existence of bad loans in the Nigerian banking
sector because high LDR means excessive loans at the expense of deposits. But it is also important to note that
none of the parameter estimates of LDR is statistically significant in the three model. This follows the previous
findings that LDR also does not have significant impact on all the bank performance indicators namely EPS,
ROCE and ROE.
Thirdly, The interest rate which is the control variable demonstrate same inverse relationship with all
the indicators of bank performance. This means that higher interest rate is a dis-incentive to improved bank
performance. Scholars like Nnanna (2002) as emphasized that a constructive and careful lowering of interest
rate will have the tendency of improving bank performance. In other words the lower the interest rate the higher
the EPS, ROCE and ROE. Again the parameter estimate is not statistically significant.
The R square value of 0.88 in model I is an indication that 88% variation in variation in the EPS is explained by
the variables of corporate governance. The R square is also very high in model II, the value is 0.81 showing that
about 81% systemic variation in ROCE is explained by the variables of corporate governance. However the
value is not as high in the 3rd
model. The value is 0.56 which means that about 56% variation in ROE is
explained by the model i.e variables of corporate governance.
The test of overall statistical significance i.e the F test shows that all the three models are not
statistically significant. This is revealed from the value of F statistics which is not significant at both 5% and
5. An Exploration of The Impact of Corporate…
www.ijbmi.org 16 | P a g e
10% levels of significance. It further attests to why individual variable of corporate governance does not have
significant impact on each of the indicators of bank performance. This is an indication that corporate governance
does not have significant impact on bank performance in Nigeria during the period under review. The durbin
Watson values of 1.77, 1.71, and 1.75 in models I, II and III respectively fall within the range of rejection of
presence of autocorrelation. This simply means that the three models are not having the problem
autocorrelation..
VI. CONCLUSION
It can be concluded from our empirical research that corporate governance does not have significant
impact on the bank performance during the period under review. It can also be deduced from our findings that
the two major indicators of corporate governance that is capital adequacy ratio (CAR) and loan deposit ratio
(LDR) respectively exhibited a positive and negative relationship with all the three measures of bank
performance. This simply means that banks in Nigeria that attempt to keep high LDR which is against the
corporate governance ethic run the risk of having lower performance. Again, it appears from our result that both
CAR and LDR do not have any significant impact on the three indicators of bank performance. It has also
shown that interest rate which is used as the control variable exhibited an inverse relationship with all the three
indicators of bank performance.
VII. RECOMMENDATIONS
Based on these findings it is recommended that:
(i) Bank operators should pay more attention to corporate governance since our findings have shown that its
role in improving bank performance is far below expectation in the Nigerian banking sector
(ii) Banks should be encouraged to maintain the required high capital adequacy ratio since high capital
adequacy ratio as a measure of corporate governance is a panacea for improved banking performance.
(iii) Monetary authorities should improve on bank supervision and monitoring in the area of loan deposit ratio
LDR. They should be encourage to keep a lower LDR . According to Christopher (2009), LDR as a
measure of corporate governance should be kept low if bank performance is to be enhanced.
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