EFFECT OF REGULATORY REQUIREMENTS ON LOAN LOSS PROVISION OF DEPOSIT MONEY BANKS IN NIGERIA.

EFFECT OF REGULATORY REQUIREMENTS ON LOAN LOSS PROVISION OF DEPOSIT MONEY BANKS IN NIGERIA.

Author by Mr. Adeyemi Ogundipe

Journal/Publisher: American Based Research Journal

Volume/Edition: 9

Language: English

Pages: 25 - 35

Abstract

Banking plays a pivotal role in economic development due to its financial intermediation function and it holds the largest financial assets in the global economy. However, in recent years, an increase in NPL's provision diminishes income as banks are exceeding the legal 5% threshold for non-performing loans and are also hindering bank's capacity to grant new loans for economic development. This study adopted an ex post facto research design. Validated data was collected from the annual financial reports of 10 deposit money banks. The panel regression analysis tool was employed to analyse the data with descriptive statistics, Pearson correlation model, multiple linear regression tools and linearity test, heteroskedasticity, autocorrelation, co-integration, and Hausman test were also carried out including analysing the data and results duly interpreted. The result show that regulatory requirements significantly effects loan loss provision (Adj.R2 = 0.345, F(9, 96) = 6.701, p < 0>


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