A COMPARATIVE ASSESSMENT OF THE PERFORMANCE OF DEPOSIT MONEY BANKS IN NIGERIA
Dr Umar Mohammed Ali , Lecturer Department of Business Administration, City University Cambodia, CambodiaAbstract
Bank performance in terms of increase earnings has implication for the survival and growth of the sector, improving the financial results constitutes the most critical aspect of performance of banks. It is against this background that the study comparatively assessed the performance of some selected deposit money banks in Nigeria. Banking in Nigeria has undergone remarkable changes since 2005 bank consolidation. The era of armchair banking has gone. It has become a different ball game in terms of competition and its inherent strategies. This transition eventually brings the Nigerian banks to be in need of capital, asset creation, earnings, liquidity and the management to manage the risk exposure of the aforementioned. In this context, the present study assesses and compares the performance of the Nigerian banks from 2005 to 2015 through their liquidity, asset quality, profitability and share price. Moreover, the Nigerian banks are ranked based on their performance. The ranking result can be used to analyze the strengths and weaknesses of a bank compared to its competitors. Simple random sampling was used to obtain five out of the twenty-one deposit money banks using lottery method. Furthermore, data for the study was obtained from the annual audited reports of the selected banks and data was analyzed using analysis of variance (ANOVA) and it was found that there is a statistically significant difference in their various performance level with regards to liquidity, asset quality, profitability and share price. The significant differences among the banks in terms of the aforementioned, implies that the null hypothesis is thereby rejected and alternate hypothesis accepted, which can now be stated as; there is significant difference between the liquidity levels of the selected banks and their performances; there is significant difference between the asset quality levels of the selected banks and their performances; there is significant difference between the profitability levels of the selected banks and their performances; there is significant difference between the share price levels of the selected banks and their performances. The study concluded with recommendations as to how the various banks can reduce the level of non-performing loans which is cardinal to improvement in banks performance.
Keywords
Banks in Nigeria, Deposit Money, growth of the sector
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