AN ANALYSIS OF POST- BANKS’ CONSOLIDATION AND DEPOSIT MONEY BANKS’ PERFORMANCE IN NIGERIA

Abstract

This research investigates the correlation between the consolidation of post-banks and the viability of Nigerian deposit banks from 2004 to 2022. The use and acquisition of time series data are derived from the CBN 2022 annual bulletin. The research used return on assets (ROA) as a measure of banks' performance and considered it the dependent variable. Additionally, total bank deposits, total bank credit, and interest rate are employed as explanatory factors to assess the impact of post-bank consolidation. Hypotheses are developed and empirically examined via the use of time series econometrics methodologies. The findings of the research indicate that the variables exhibit stationarity at this level. A long-term equilibrium link exists among the consolidation of post-banks and the performance of Nigerian deposit banks. The findings of this research provide confirmation that there is an approximate short-run adjustment speed of 54% for long-run disequilibrium. The r² suggests that around 50% of the fluctuations in the viability of deposit banks may be accounted for by changes in the variables related to post-banks' consolidation. The research suggests that it would be beneficial for bank management to enhance the effectiveness of their credit administration supervisory units as a means of mitigating the issue of non-viable loans. In order for Nigerian banks to have a significant presence in both local and foreign markets, it is imperative that their capital levels consistently exceed the minimal regulatory standards. Banks ought to actively intensify their overall marketing efforts while also conducting periodic evaluations of their shareholders' money and total assets.