CORPORATE SOCIAL RESPONSIBILITY COSTS AND FINANCIAL PERFORMANCE OF LISTED DEPOSIT MONEY BANKS IN NIGERIA

Abstract

The study investigated the effect of corporate social responsibility costs on financial performance of listed deposit money banks in Nigeria. The specific objectives were to ascertain the effect of community development cost, health and safety cost, social regulation cost on net profit margin. The study collected secondary data from the annual reports of fifteen banks listed on the Nigeria Stock Exchange from 2015 to 2024. Eight of the banks were used as sample of this study using purposive sampling techniques. The method of data analysis was descriptive statistic, unit root test, Heteroskedasticity Diagnostic Test such as Breusch-Pagan-Godfre Heteroskedasticity test, Harvey Heteroskedasticity Test and Heteroskedasticity Test: Glejser. Finally the study adopted Auto Regressive Distributive Lag (ARDL) model with the help of E-view v10. Findings revealed, community development cost has negative and insignificant effect on net profit margin of listed deposit money banks in Nigeria in term of short run but in the term of long run, Community development cost has positive and insignificant effect on net profit margin of listed deposit money banks in Nigeria. Health and safety cost has negative and significant effect on net profit margin of listed deposit money banks in Nigeria in both short run and long run. Furthermore, social regulation cost has positive and significant effect on net profit margin of listed deposit money banks in Nigeria in both short run and long run. The study generally concluded that that there is significant effect of corporate social responsibility costs on financial performance of listed deposit money banks in Nigeria. The study recommended, among others, that; recruitment, hiring and training of competent personnel are very essential in facilitating not only the level of productivity but also the development of personnel in any organization. The bank therefore, should take staff training seriously.