The impact of corporate governance on the non performing loans of Nigerian Deposit Money banks (original) (raw)

Impact of Corporate Governance on Non-Performing Loans of Nigerian Deposit Money Banks

Journal of Business & Management, 2013

This study examines the impact of Corporate Governance (CG) 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 these CG variable can be useful in curtailing the incidence of non-performing loans that have bedeviled Nigerian Money Deposit Banks. Secondary data was used from fourteen (14) quoted banks on Nigerian Stock Exchange from 2005-2011. Using multivariate regression analysis, the study finds that corporate governance variables of BS, BC, CAC and PS have no significant impact on non-performing loans of Nigerian Deposit Money Banks. Hence, the study concludes that BS, BC, CAC and PS cannot be relied upon to check the rising figure of non-performing loans of Nigerian Deposit Money Banks. Therefore, we recommend that the oversight and monitoring functions of Central Bank of Nigeria should be strengthened to ensure adherence to rules and principles guiding the approval and monitoring of loans and advances.

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.

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.

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 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 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.

Effect of corporate governance on financial performance of listed deposit money banks in Nigeria

Global Journal of Social Sciences

This study examined corporate governance and financial performance of listed deposit money banks (DMBs) in Nigeria. The study covered listed DMBs listed in the Nigerian Stock Exchange (NSE) for a ten year period from 2007-2016 and data were obtained from their annual financial reports. Data were presented using tables and analyzed using panel data regression. The corporate governance mechanisms of board size (BSIZE), board composition (BCOM) and audit committee (ACOM) were used as independent variables. Performance of the listed DMBs was measured by return on asset (ROA) which is the dependent variable while the bank size (FSIZE) was used as a control variable.The findings of this study revealed that board size had a positive but insignificant relationship with performance. It was also observed that audit committee, board composition and bank size all had positive and significant relationships with return on asset. The study therefore concludes that board composition and audit committee are good predictors of performance as measured by return on assets (ROA). The study recommended that DMBs listed in the Nigerian Stock Exchange should strive to have an average of fourteen members in their boards to avoid decision-making problems which are characterized by larger board of directors and should therefore comprise a mix of executive and nonexecutive directors with the relevant credentials, competence, and experience to serve on the board of banks. Additionally, the audit committee of banks should meet often to enable them review the financial reports of the banks and make appropriate recommendations that will help to improve the performance of the banks.

Effect of Corporate Governance on Performance of Deposit Money Banks in Nigeria

Journal of emerging technologies and innovative research, 2020

The study examined the effect of Corporate Governance on the Performance of Deposit Money Banks in Nigeria. Ex-Post Facto research design was adopted and secondary data were obtained from Annual reports of selected Deposit Money Banks for a period of ten years (2009-2018). The objectives are to investigate the extent to which Board size affects Return on Equity and also to determine the effect of Board composition on the Net profit of Deposit Money Banks in Nigeria. Hypotheses were formulated and analyzed using Ordinary Least Square (OLS) regression method. The result reveals that the Board size has significant and positive effect on the Return on Equity (ROE) of Deposit Money Banks in Nigeria. It equally shows that Board composition has positive significant effect on their net profit as well. The study recommends that effort should be made to increase shareholders’ returns on investment by making sure that corporate organizations appoint Board members based on professional expertis...

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 ON BANK PERFORMANCE IN NIGERIA

ijetrm journal , 2021

The study examined the effect of corporate governance on bank performance in Nigeria. The study specifically investigate the extent to which board size, board independence and ownership structure influence bank performance for the period of five years which covered 2013 to 2017. Data were sourced from Annual report and statement of financial accounts of the selected companies. Panel Data econometric technique which included least squares dummy variable (LSDV), random effect model and Hausman tests were employed. The model adopted return on asset (ROA) as the dependent variables while Ownership structure (OWNSTR), Board independence (BIND), and Board size (BSIZE) were used as the explanatory variables to capture corporate governance. The study found that board independence (BIND) has positive effect on return on asset while Ownership structure (OWNSTR), and Board size (BSIZE) has a negative impact on return on asset. The study concluded that corporate governance hasinsignificant effect on bank performance. Based on the finding of the study, it was recommended that Size of the board (membership) should be increased but not exceeding the maximum number specified by the code of corporate governance for banks.