MARKET INTEREST RATES AND COMMERCIAL BANK PROFITABILITY: (A CASE STUDY OF FIRST BANK OF NIGERIA PLC (2000 – 2004)
- Project Research
- 1-5 Chapters
- Abstract : Available
- Table of Content: Available
- Reference Style: APA
- Recommended for : Student Researchers
- NGN 3000
Abstract
This study examined how interest rates affect the profitability of Commercial banks in Nigeria. The study was based on country aggregate level annual data that covered a period of thirteen years 2000 to 2004 and made use of multivariate regression analysis under an econometric framework. The Augmented Dickey and Fuller unit root test results indicate that the series are either I(0), I(1) or I(2) stationary. The estimated results show that Maximum lending rate, Real Interest rate and Savings deposit rate have negative and significant effects on the profitability of Nigerian Commercial banks as measured by return on assets at the 5% level of significance. Also, the study found that Real interest rate at the 8% level of significance has negative and significant relationship with Return on Equity of money deposit banks in Nigeria. On the other hand, the study found no significant relationship between interest rate variables and Net Interest Margin of Commercial Banks in Nigeria. The implication of the findings of this study suggests that the profitability of the banking sector is a function of changing interest rates. The study therefore recommends that government should adopt monetary policies that will help Nigerian Commercial banks to improve on their profitability and there is need to review and strengthen bank lending rate policies through effective and efficient regulation and supervisory framework. Banks can improve their profitability through charging moderate lending rates as against maximum rates as their circumstances may allow. Furthermore, the managers of money deposit banks are expected to create the conditions for an efficient banking system devoid of information asymmetry to adapt to changing macroeconomic variables of interest rates and inflation. Banks’ management must efficiently manage their portfolios in order to protect the long run interest of profit-making.
Related Project Materials
ANTI-DIARRHOEAL AND SUBCHRONIC TOXICITY STUDIES ON METHANOL STEM BARK EXTRACT OF IRIVINGIA WOMBOLU VERMOESEN (IRVINGIACEAE) IN LABORATORY ANIMALS
Abstract
Irvingia wombolu is one of the herbal plants used as food for its nutritional values. It is also used as medicinal plant in the...
GRAPHOLOGICAL FOREGROUNDING IN CHIMAMANDA ADICHIE’S PURPLE HIBISCUS
ABSTRACT
There is a symbiotic relationship between language structure and language function, which is p...
DESIGN AND IMPLEMENTATION OF SALES MANAGEMENT SYSTEM
OBJECTIVE OF THE STUDY
The objective of this project work is to bring to the awareness the improved system of computing sa...
IMPORTANCE OF CAREER DEVELOPMENT AS A DETERMINANT OF ORGANIZATIONAL GROWTH
ABSTRACT
The need for an organization to ensure that its workers /staff are sent periodically for appro...
DESIGN AND IMPLEMENTATION OF AN ONLINE BIRTH RATE MONITORING INFORMATION SYSTEM
Abstract
This project is specially put together with the aim of monitoring infant and natality rate through the use of information s...
EFFECTS OF SUBSIDY REMOVAL ON THE MOBILITY OF WORKERS IN NIGERIA
Background of the study
Among other major factors that influences transport costs and transport rates i...
THE GEOCHEMISTRY, PALYNOLOGY AND PALYNOFACIES CHARACTERISTICS OF MAIGANGA COAL DEPOSIT, UPPER BENUE TROUGH, NIGERIA
ABSTRACT
Geochemical, palynological and palynofacies studies had been carried out on samples from 24 boreholes that penetrated Gombe Form...
AN ANALYSIS OF INTERNET HOSPITAL LOCATION SYSTEM USING GOOGLE MAPS
BACKGROUND OF THE STUDY
Location-based services are quickly becoming one of the most valuable capabilities available on...
AN ASSESSMENT OF THE ATTITUDE OF TEACHERS TOWARDS GUIDANCE AND COUNSELLING PROGRAMMES IN SECONDARY SCHOOLS
ABSTRACT
This study is aimed at identifying an assessment of the attitude of teachers towards guidance...
THE IMPACT OF PERFORMANCE MANAGEMENT OF THE PROFITABILITY OF MANUFACTURING FIRMS IN NIGERIA
ABSTRACT
The study examined the impact of performance management on the profitability of manufacturing firms in Ni...
