Impact of Corporate Governance on Non-Performing Loans of Nigerian Deposit Money Banks (original) (raw)
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The impact of corporate governance on the non performing loans of Nigerian Deposit Money banks
The objective of the study was to examine the impact of Corporate Governance variables of Board size(BS), Board Composition(BC), Composition of Audit Committee(CAC) and power separation(PS) on Non-performing Loans of Nigerian Deposit Money Banks; with a view to finding out whether there is significant impact or not. The researcher used secondary sources of data. The study examined the corporate governance variables amongst fourteen (14) quoted banks on Nigerian Stock Exchange from 2005-2011 using multivariate regression analysis. The findings showed that corporate governance variables of Board size, Board Composition, composition of audit committee and power separation have no significant impact on non-performing loans of Nigerian Deposit Money Banks. The study concluded that board size, board composition, composition of audit committee and power separation is not the reasons for the rising figure of non-performing loans of Nigerian Deposit Money Banks. Therefore, it is recommended that emphasis should be shifted from these explanatory variables (BS, BC, CAC and PS) to other corporate governance issues, such as insider abuse, transparency and accountability and so on, for further investigation.
Corporate Governance and Financial Performance of Money Deposit Banks in Nigeria
Review of innovation and competitiveness, 2021
Purpose. The main cause of distress in the majority of Nigerian banks is poor corporate governance in the country. Corporate governance (CG) is a contemporary subject attracting the consideration of the corporate world, practitioners, consultants, academia and society at large. As a result, this study explores the financial performance (FP) of money deposit banks (MDBs) in Nigeria as a result of corporate governance put in. It went on to investigate the impact of board size and composition, as well as the audit committee, on bank financial performance. Methodology. A descriptive design method was adopted, while secondary data in the form of yearly financial reports of banks selected for the study were obtained and relevant documents via electronic search of databases. Descriptive statistics were used in analyzing the data and an econometric model of panel least square (PLS) regression test was employed for the study. Findings and Implication. The findings affirmed that the correlati...
CORPORATE GOVERNANCE AND FINANCIAL PERFORMANCE OF LISTED DEPOSIT MONEY BANKS IN NIGERIA (2006-2015
Nigerian Journal of Banking, Finance and Entrepreneurship Management, 2016
This research examined the relationship between corporate governance and financial performance in the Nigerian consolidated banks between year 2006 and year2015; using return on capital employed, earnings per share, return on assets and return on equity as the proxies for bank performances; and Board Size (BDS), Board Composition (BDC), debt structure as the proxies for corporate governance. Ordinary least square (OLS) regression at 0.01 < 0.03 < 0.05, and t-test on the probability of 0.01 < 0.05 were used to tryout the formulated hypotheses. The study therefore discovered that a negative but significant relationship exists between board size, board composition and the financial performance of these banks, while a positive and significant relationship was also noticed between director's equity interest, level of governance disclosure and performance. Moreover, the t-test result indicated that while a significant difference was observed in the profitability of the healthy banks and the rescued banks, no difference was seen in the profitability of banks with foreign directors and that of banks without foreign directors. The study hence concludes that there is no uniformity in the disclosure of corporate governance practices by the banks. Likewise, the banks do not disclose in general how their debts are performing, by providing a statement that shows outstanding debts in terms of their ages and due dates. The study suggests that efforts to improve corporate governance should focus on the value of the stock ownership of board members. Also, steps should be taken for required compliance with the code of corporate governance while an effective legal framework that specifies the rights and obligations of a bank, its directors, shareholders, specific disclosure requirements and provide for effective enforcement of the law should be developed.
Implications of Corporate Governance on Banking System Stability in Nigeria: 2004 – 2014
2018
The broad objective of this study is to investigate the implications of poor corporate governance practice on the banking system stability in Nigeria and other specific objectives. To achieve these objectives, ex-post facto research design and panel regression analysis were adopted. The dependent variable is non-performing loan to total assets and the independent variables are board composition, board size, bank size, and net income; the following findings were made at 5 percent level of significance; the study accepted the first alternate hypothesis that board composition has no significant effect on banking system stability in Nigeria. For the second hypothesis, the study accepted the second null hypothesis and rejected the alternate hypothesis that board size has significant effect on banking system stability in Nigeria. The study rejected the third hypothesis which states that bank size has no significant effect on banking system stability in Nigeria. The implications of these f...
CORPORATE GOVERNANCE AND PERFORMANCE OF DEPOSIT MONEY BANKS IN NIGERIA
IAEME PUBLICATION, 2021
STRACT The study examined corporate governance and performance of Deposit Money Banks in Nigeria. Data used for this study were secondary data collected from the audited financial statements of 10 Deposit Money Banks listed on the Nigerian Stock Exchange (NSE) for ten years, spanning from 2008 and 2017. Descriptive analysis conducted in the study includes mean analysis, standard deviation analysis, minimum and maximum analysis. This was followed by correlation analysis, panel estimations including Pooled Ordinary Least Square (OLS), fixed effect and random effect estimation, alongside post estimation tests such as restricted F-test, Hausman test, Wald test of heterogeneity, Wooldridge autocorrelation test and Pesaran test of crosssectional dependence. Result revealed that board size exerts a negative and significant effect on the performance of Deposit Money Banks in Nigeria to the tune of - 0.8462=(p=0.009<0.05),board composition exerts a negative and significant effect on return on assets of Deposit Money Banks in Nigeria to the tune of -2.3177(p=0.001<0.05), board audit committee has a positive but insignificant effect on return on assets to the tune of 1.3748(p=0.515>0.05),sitive but insignificant effect on return on assets to the tune of 1.3748(p=0.515>0.05), Chief Executive officer (CEO) duality has a positive but insignificant effect on the performance of on return on assets of Deposit Money Banks in Nigeria to the tune 2.4951(p=0.227>0.05)and that gender diversity exerts a positive but insignificant effect on the performance of Deposit Money Banks in Nigeria to the tune of 5.1647(p=0.685>0.05)It is therefore established that corporate governance exerts a significant effect on the performance of Deposit Money Banks in Nigeria.
i-manager’s Journal on Management, 2013
Objective The study objective is aimed at finding the relationship between corporate governance bank distress in deposit money banks. The research design adopted in this paper is the case study method, in other to have an intensive insight of the subject matter. Methodology Primary data was used specifically the survey technique. The method that was used in the presentation of data in this study is the Statistical Package for Social Sciences (SPSS) which contains all the necessary and important statistical technique for data analysis.Findings For testing the hypothesis, correlation analysis which measures the degree of relationship between variables was used to analyze the result generated from the questionnaire. The evidence shows that corporate governance has no significant improvement on the prevention of bank distress but has significantly improved the performance of the Nigerian banking sector. Recommendation We therefore recommend that banks should demonstrate strong internal policies to identify and manage conflict of interest and zero tolerance posture against cases of unsound corporate governance practices.
Corporate Governance and Deposit Money Banks’ Performance in Nigeria
2019
this study examined the influence of corporate governance on the financial performance of banks in Nigeria. The specific objective of the study is to examine the influence of corporate governance on the financial performance of banks. Bank performance was used as a dependent variable during Board size, Board composition. Gender diversity and Number of audit meetings were used as independent variables; profit after tax was used as a proxy to measure performance. The study adopted the ex-post facto as its research design while the secondary data was used sourcing its data from the annual report of banks for fifteen years (2003-2017). The student t-test, f-test, coefficient of determination and Pearson correlation were the statistical tools used in testing the significance of the variables and the model. The findings revealed that all the independent variables have a significant influence on the dependent variable through the Pearson correlation result revealed that Audit meeting, Boar...
Corporate Governance and Bank Performance in Nigeria: Further Evidence from Nigeria
International Journal of Business and Management, 2014
The paper examines the extent to which corporate governance contributed to financial crisis in the Nigerian banking industry between the periods 2000 and 2010. Panel data on post consolidated banks in Nigeria for the pre and post 2004 consolidation reforms were used. Two measures of bank performance (return on equity and net interest income) were used as dependant variable on a model that included both number of board members and related insider loans as measures of corporate governance. It was found that while size of board was significant positive insider loan is negatively related to bank performance. The paper concludes that insider loan was the most detrimental consequence of lack of corporate governance in the Nigeria banking industry. The issue raised in some studies about the size of the board members, this paper found a relatively higher number of board members to be more performance enhancing and aiding effective coordination of banks operating within the peculiarity of Nigerian financial system
EFFECT OF CORPORATE GOVERNANCE MECHANISM ON THE FINANCIAL PERFORMANCE OF BANKS IN NIGERIA
The lingering cases of fraudulent acts and low level of actual financial performanceof Nigerian banks necessitated this study. Thus, this research study examined the effect of corporate governance mechanisms on the financial performance of banks in Nigeria. This study used secondary data derived from the audited financial statements of the sampled banks in Nigeria from 2006 to 2014. Ordinary Least Square (OLS) regression was used to find out the effect of corporate governance variables on banks' performance. Gretl econometric software was used for the analysis. The study observed that board audit committee and directors' equity interest have a positiveand significant effect on financial performance of banks; while board composition has a negativebut significant effect on banks' financialperformance. The study concluded that the existence of board audit committee enhances banks' financial performance.Thus, this study recommended that Banks should have audit committee in their board to enhance a higher financial performance. The members of the audit committee should be given the opportunity to discharge their duties effectively without undue influence.
International Journal of Applied Research in Social Sciences
This study examined the effects of corporate governance (CG) on performance of deposit money banks (DMBs) in Nigeria between the periods 2012-2021 (10years). The specific objective of the study is to examine the relationship between the measures of CG [Board Size (BS), Board Independence (BI), Board Gender Diversity (BGD), Audit Committee Size (ACS) and Audit Committee Independence (ACS)] and [performance of DMBs proxy with Returns on Equity (ROE)]. The data for the study would be gotten from the annual reports and accounts of the 10 DMBs on the basis of the variables under study. The type of relationship between the independent and dependent variables will be determined using descriptive statistics and correlation analysis, and the method of data analysis chosen was a multiple regression analysis using the OLS method by E-VIEW 9.0. DMBs that wish to enhance their FP, especially post covid-19, should try to reduce their BS to plus or minus ten, but with strict adherence to the regul...