ATTENTION:
BEFORE YOU READ THE CHAPTER ONE/ABSTRACT OF THE PROJECT TOPIC
BELOW, PLEASE READ THE INFORMATION BELOW.THANK YOU!
INFORMATION:
YOU CAN GET THE COMPLETE PROJECT OF THE TOPIC BELOW. THE FULL
PROJECT COSTS N5,000 ONLY.
THE FULL INFORMATION ON HOW TO PAY AND GET THE COMPLETE PROJECT
IS AT THE BOTTOM OF THIS PAGE. OR YOU CAN CALL: 08137701720
THE EFFECT
OF FINANCIAL PERFORMANCE BANKING SECTOR ON ECONOMY GROWTH IN NIGERIA
ABSTRACT
The study
examined the effect of financial performance banking sector on economic growth
in Nigeria, a case study of three selected deposit money banks in Lagos State.
The study employed the survey design and the purposive sampling technique to
select 450 staff across management, senior and junior level. A well-constructed
questionnaire, which was adjudged valid and reliable, was used for collection
of data from the respondents. The data obtained through the administration of
the questionnaires was analyzed using the Pearson correlation analysis.
The results
of the correlation analysis showed that there is positive and significant
relationship between banking liquidity and economic growth (r=0.772;
p<0.05). Also, a positive and significant relationship exists between
banking loan to deposit and economic growth (r=.896; p<0.05). Furthermore, a
positive and significant relationship exists between return on assets and
economic growth (r=0.772; p<0.05).
The study
concluded that financial performance of banking sector has a significant effect
on economic growth in Nigeria.
Based on the
findings of the study, its hereby recommendations that Liquidity ratio, should
be employed on both operational and financial by the management of every bank,
to ensure that bank’s assets are safeguarded, cash inclusive; Internal audit,
Accounting and Finance department should be established in every bank, which
should be headed by a qualified accountant so the loan to deposit (LD) can be
well monitored and recorded; Banks should arrange for cash, assets and
investment in transit insurance cover in order to prevent the risk of loss of
any cash in transit so the economy won't be affected negatively; Return on
Asset should be adequately seen as an
indicator that should be mostly attractive to banking industry because this is
compulsory indicator that can boost the financial performance of banks, and
when the banks in Nigeria are doing well, it will sure have good effect on the
Nigeria economy; Management of all banks should keep doing everything possible
to keep increasing the financial level of the organization.
CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
Financial
performance is the subjective measure of how well a firm can use assets from
its primary mood of business and generate more revenue. It is also a general
measure of a firm’s overall financial capability over a given period of time.
Economic
growth is the increase in the inflation adjusted market value of the goods and
services produced by an economy over time. According to IMF (2012),It is
conventionally measured as the percentage rate of increase in real gross
domestic productusually in per capita terms. Growth is usually calculated in
real term to eliminate the distorting effect of inflation on the price of goods
produced. Bjork (1999) Measurement of economic growth uses national income
accounting since economic growth is measured as the annual percent change of
gross domestic product,it has all the advantages and drawbacks of that
measure.The banking sector include a diverse group of financial service firm,
including investment banks and brokerages, diversified commercial banks and
custodial bank and asset managers.
Douglas and
Philip (1983) opined that liquidity fraction of savers receive shocks after
choosing between two investments: an illiquid, high- return project produce.
Syed Muhammad Hamza,(2009),the banks provide social things to the people in the
community like when you meet up to a targeted amount of savings you tend to in
a price from them and this assist in providing thing to the people in the
community and this increase the rate at which the economy grow which is measure
with the use of the Gross Domestic Product).
Ekpenyong
David B (2011) Economic growth seen from outer space; economists studying
economic growth rely heavily on estimates of gross domestic produt, which are
produce by national statistical offices as well as the various international
agencies for building sustained economic
growth of the economy vibrant system. The financial performance of the banking
sector is affected by the regulation of the system. When we bring the rule of
supply and demand with the interest every customer earn a lot of interest on
the deposit made and here by encourage more of saving (ObademiOlalekan
Emmanuel, 2014).
Thus, this
study examined the effect of financial performance of banking sector on
economic growth in Nigeria.
1.2
Statement of the problem
The Nigerian
government having realized that adequate supply of credit to the economy is a
crucial factor for growth process, have introduced several reforms to boost the
growth of the banking sector thereby boosting the economic growth and reducing
the rate of poverty and unemployment in the country. The fact that these
various reform efforts have resulted in growth in the number of financial
institutions and instruments, it is of paramount importance to note here that,
this in itself cannot be taken as evidence of financial growth that is
accompanied by growth in the real sector (Soludo, 2007).
Lack of
access to income opportunities or skill-based training opportunities kept many
people in Nigeria shackled to poverty. Unemployment is high, forcing many
people to immigrate to other countries. Unless the poor people are brought into
the mainstream for economic and social change, we will fail to bring change
development (Akhavein, 1997).
The
International Monetary Fund as well as the Central Bank of Nigeria have all
agreed that Nigeria economy has plunged into recession. This will lead us to
the causes of Nigeria recession and the possible solutions. One of the most
prevalent causes for recession is high inflation, a general rise in price of goods
and services. Another cause of recession is poor planning as it relate to the
budget delay and also exchange rate policy. Economic recession is measured on
the basis of Gross Domestic Product and some other economic performance
indicators, through is part of the cause. The fact is that there are some
solutions to all the causes of economic recession which are: invest in the
energy sector, avoid double taxation, borrowings from both domestic and foreign
should be invested more infrastructure (Emmanuel, 2017).
1.3Objective
of the study
The main
objective of this study is to find the effect of financial performance of
banking sector on economic growth in Nigeria.
The specific
objectives are:
1) To determine the effect of liquidity on
economic growth.
2) To determine the impact of loan to
deposit on economic growth.
3) To determine the impact return on asset
on economic growth
1.4 Research
Questions
1) What is the effect of economic growth on
liquidity of Nigerian banks?
2) What is the effect of economic growth on
loan to deposit of Nigerian banks?
3) What is the effect of economic growth on
returns on assets of Nigerian banks?
1.5
Hypotheses
The
hypotheses were formulated in line with the objectives of the study as follows:
1) Ho: Economic growth has no significant
effect on liquidity of Nigerian banks.
H1: Economic growth has a significant
effect on liquidity of Nigerian banks
2) Ho: Economic growth has no significant
effect on loan to deposit of Nigerian banks.
H1: Economic growth has a significant
effect on loan to deposit of Nigerian banks.
3) H0: Economic growth has no significant
effect on Returns on assets of Nigerian banks
H1: Economic growth has a significant
effect on Returns on assets of Nigerian banks
1.6Operationalization
of variables
The focus of
the study is on the effect of financial performance of banking sector on
economic growth in Nigeria. Thus, two variables are identified in this study,
namely dependent and independent variables. The dependent variable is economic
growth while independent variable is financial performance of banking sector
which is measured with Liquidity ratio (LR), Loan to deposit (LR), Return on
asset (RA).
The
functional relationship is
Y=f (x)
Y= Economic
growth (EG)
X= Bank
Financial Performance (BFP)
X =x1, x2.x3
x1 =
Liquidity ratio (LR)
x2= Loan to
deposit (LD)
x3= Return
on asset (RA)
EG =f (LR)
EG =f (LD)
EG =f (RA)
1.7
Significance of Study
The
significant of the study is premised on the effect of financial performance of
banking sector on economic growthin Nigeria. Since the banking sector of any
country forms one of the main determinations of economic growth, to neglect
such study as the banking sector would be as serious as neglecting the economy
itself. The gross domestic product as proxy for standard of living in any
economy has been very volatile. The justification of the study is the 2009
financial crisis witnessed in the Nigeria Banking sector in which eight of its
bank was declared distressed (CBN, 2009).
This work
will not only empirical contribute to knowledge, but as well serve as evidence
to policy makers, operators and regulations in the banking sector on how
transform the Nigerian Banking Sector into one of the safest and fastest
growing banking sector among the emerging economies.
1.8 Scope of
the Study
The scope of
the study is to focus on the effect of financial performance banking sector on
economy growth in Nigeria. The study covers a period of 5years (2012-2016) and
will use primary data from questionnaire administration.
1.9
Operational definition of terms
Deposit: - A
sum of money paid into a bank or building society account. Bank Deposit
consists of money placed into institutions for safe keeping.
The account
holder has the right to withdraw deposited funds, as set forth in the terms and
conditions governing the account agreement.
Redraw: - Redraw is the term used to describe
the ability to withdraw money (from additional payments you have made) when you
need from your variable rate Home Loan. Redraw is the difference between your
current balance and what the balance would have been of if you hadn’t made any
additional repayment.
Credit
Facilities: - is a type of loan made in a business or corporate finance
context, including revolving credit, term loans committed faculties’ letters of
credit and most retail credit account.
Lending
Rate: - The amount a bank charges on money that it lends.
Interest
Rate Spread: - This can be calculated by subtracting lending rates from Deposit
rate. Interest rate spread is the interest rate charged by Banks on loans to
prime customers minus the interest rate paid by commercial or similar banks for
demand, time or saving deposit.
Liquidity Ratio: a company's ability to repay
short-term creditors out of its total cash. It is the result of dividing the
total cash by short-term borrowings. It shows the number of times short-term
liabilities are covered by cash. If the value is greater than 1.00, it means
fully covered.
Return on
assets (ROA): the percentage of how profitable a company's assets are in
generating revenue.
Human
Development Index (HDI): is a composite statistic of life expectancy,
education, and per capita income indicators, which are used to rank countries
into four tiers of human development.
Get the
Complete Project
Search
search engine by freefind advanced
Paper Information
Format: Ms Word Document
Pages:
56
Price: N 3,000
Chapters: 1-5
Download This Paper
Featured Papers
Making Awesome Presentations: Tips and Tricks
for Project Defense
Developing Outstanding Research Topics
Challenges of Personal Income Taxation
in Ghana
Work-Life Balance and its Effect on
Employee Productivity.
Effect of Employee Benefits on
Organizational Performance
Impact of Monetary Policies on Foreign
Trade in Nigeria
HOW TO GET THE FULL PROJECT WORK
PLEASE, print the following instructions and information if you
will like to order/buy our complete written material(s).
HOW TO RECEIVE PROJECT MATERIAL(S)
After paying the appropriate amount (#5,000) into our bank Account
below, send the following information to 08137701720
(1) Your project topic
(2) Email Address
(3) Payment Name
(4) Teller Number
We will send your material(s) after we receive bank alert
BANK ACCOUNTS
Account Name: AMUTAH DANIEL CHUKWUDI
Account Number: 0046579864
Bank: GTBank.
OR
Account Name: AMUTAH DANIEL CHUKWUDI
Account Number: 2023350498
Bank: UBA.
NOTE:
YOU CAN ALSO MAKE A TRANSFER PAYMENT
FOR MORE INFORMATION, CALL:
08137701720AFFILIATE LINKS:
Comments
Post a Comment