DETERMINANTS OF PROFITABILITY IN THE NIGERIAN DEPOSIT MONEY BANKS
1 Department of Accounting, Faculty of Arts, Management and Social Sciences, Federal University Dutsin-Ma, Katsina State, Nigeria.
2 Department of Accounting, Faculty of arts and Social Sciences, Nigerian Defence Academy, Kaduna State – Nigeria
* Corresponding author: onyeosuagwu@yahoo.com
2 Department of Accounting, Faculty of arts and Social Sciences, Nigerian Defence Academy, Kaduna State – Nigeria
* Corresponding author: onyeosuagwu@yahoo.com
Abstract
The issue of poor performance of deposit money banks in Nigeria has been a
long standing one, Consequently this study examined the determinants of
profitability of deposit money banks in Nigeria using both internal
variables (capital adequacy ratio, asset quality ratio and liquidity ratio)
and external variables (Gross Domestic Product , interest rate and rate
of inflation). Seven banks were sampled and the scope of the study
covered the period 2008-2013. The data which were obtained through
secondary sources were analysed using ordinary least square regression.
The findings revealed that some internal variables (capital adequacy ratio,
and liquidity ratio) and external variable (Gross Domestic Product have
significant impact on the profitability of deposit money banks in Nigeria,
While Asset Quality Ratio, Interest rate and Inflation rates are statistically
insignificant. It is recommended amongst others that efforts should be made to ensure that the prevailing credit policy of the Central Bank of
Nigeria must be fully observed in considering credit request from
customers to reduce default in loan refund in the Nigerian banking
industry.
Keywords
Profitability
internal variables and external variables
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How to Cite
Onyewuchi, O. G., & Benjamin, U. D. (2013). DETERMINANTS OF PROFITABILITY IN THE NIGERIAN DEPOSIT MONEY BANKS. Nigerian Journal of Accounting Research, 9(2), 101-114.
O. G. Onyewuchi, and U. D. Benjamin, "DETERMINANTS OF PROFITABILITY IN THE NIGERIAN DEPOSIT MONEY BANKS," Nigerian Journal of Accounting Research, vol. 9, no. 2, pp. 101-114, December 2013.
