Effect Of Banking Regulation On The Performance Commercial Banks In Nigeria (2000-2016)

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