Determinant of Profitability of Nigerian Deposit Money Bank

Determinant of Profitability of Nigerian Deposit Money Bank

Author by Sanyaolu, Wasiu Abiodun

Journal/Publisher: Economic Review - Journal Of Economics And Business

Volume/Edition: 17

Language: English

Pages: 47 - 62

Abstract

This study investigates banks’ specific and
macroeconomic determinants of profitability of
ten listed deposit money banks in Nigerian
Stock Exchange from 2008 to 2017 using fixed
effect regression. The result reveals that capital
adequacy, nonperforming loan, loan to total
asset and size have significant positive effect on
profitability, while age was found to exert
significant but negative effect on profitability.
The study could not however establish significant positive effect of macroeconomic indicators (economic growth and interest rate) on
profitability of deposit money banks while inflation rate has negative but insignificant influence on profitability. Arising from the findings,
the study recommends that government should
initiate and execute economic policies that will
improve the profitability of deposit money
banks in Nigeria given the key role of the sector
to the economy while banks should also manage their specific variables that are likely to
improve profitabilit

 


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