ABSTRACT

This study examines the effect of Banking Regulation via capital adequacy ratio and monetary policy variables on the performance of commercial Banks operating in Nigeria during 2000-2016. The monetary policy tools considered for the study were monetary policy rate and liquidity ratio, while profitability of commercial banks was measured by their return on assets (ROA). The data used for the study was Time series secondary data sourced from Nigeria Deposit Insurance Corporation Annual Report and Central Bank of Nigeria Statistical Bulletins. The data used for the study was analyzed with multiple regression analysis. The findings revealed that capital adequacy ratio and monetary policy rate had a positive and significant effect on commercial banks profitability while the effect of liquidity ratio was negative and insignificant. Hence, it was recommended among other things that Central Bank of Nigeria should maintain the policy rate at a level so that commercial banks would concentrate on their profitability by charging lower interest rate and providing handsome return to depositors.

TABLE OF CONTENTS

Title Page i

Declaration ii

Certification iii

Dedication iv

Acknowledgements v

List of Tables viii

Abstract ix

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study 1

1.2 Statement of problem 3

1.3 Objectives of the study 5

1.4 Research Questions 5

1.5 Research hypothesis; 5

1.6 Significance of the study 6

1.7 Scope of the study 6

1.8 Limitations of the study 7

CHAPTER TWO

LITERATURE REVIEW

2.1 Conceptual Framework 8

2.1.1 Concept of Regulation 8

2.1.2 Reasons for the Regulation of Nigerian Banks 11

2.1.3 The Concept of Capital Adequacy 12

2.1.4 Concept of monetary policy in Nigeria 17

2.1.5 Instruments of Monetary Policy 20

2.1.6 Objectives or Goals of Monetary Policy: 24

2.1.7 The Concept of Financial Performance 25

2.2 Theoretical Framework 26

2.3 Empirical Review 30

CHAPTER THREE

RESEARCH METHODOLGY

3.1 Research Design 37

3.2 Area of study 37

3.3 Sources of Data Collection 37

3.4 Validity and Reliability of the instrument 38

3.5 Analysis Techniques 38

3.6    Model Specification 38

3.7 Description of variables 39

3.7.1   Dependent variable     39

3.7`.2  Independent variables;     39

CHAPTER FOUR

PRESENTATION OF DATA, ANALYSIS AND DISCUSSION

4.1 Presentation of Data     40

4.2 Data Analysis and Discussion of Results     41

4.2.1 Descriptive Statistic     41

4.2.2 Regression Analysis     42

4.2.2.1  Discussion of Results and Hypotheses Testing     43

CHAPTER FIVE

SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS

5.1 Summary of Findings 46

5.2 Conclusion 46

5.3 Recommendations 47

REFERNECES

APPENDIX