Impact of Monetary Policy (Interest Rate) Regimes on the Performance of the Banking Sector in Nigeria

Ndubuaku, Victor; Ozioma., Ifeanyi; Chiaka, Nze; Samuel, Onyemere

doi:10.9790/5933-0804011632

Cited by 6 publications

(5 citation statements)

References 10 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…The results indicate that Monetary Policy has a significant negative impact on return on investment; therefore, an increase in monetary policy will likely decrease mutual fund performance. This is in line with the study conducted by Ndubuaku et al (2017) who established that monetary policy has a significant negative relationship with banking performance in Nigeria. The result is also consistent with the study done by Adam et al (2014) who brought to the fore that monetary policy negatively affects Banking financial performance in Pakistan.…”

Section: Panel Ardl Results For Macroeconomic Determinants Of Mutual Fund Performancesupporting

confidence: 92%

“…The short-run effect of the T-Bill is consistent with the findings in Marfo (2016) and Mwangi, 2013) but opposed to the outcomes in Ongeri (2014) and Kariuki (2014). The long-run effect of the T-Bill is, however, in harmony with Kariuki (2014) and Ongeri (2014) but opposed to Mwangi (2013) and Marfo (2016). Theoretically, the T-Bill rate and Monetary Policy Rate have a positive relationship as the two serve as signaling or leading indicators from an economic policy perspective.…”

Section: Panel Ardl Results For Macroeconomic Determinants Of Mutual Fund Performancesupporting

confidence: 84%

See 1 more Smart Citation

Macroeconomic determinants of mutual funds performance in Ghana

Gyimah

Addai

Asamoah³

2021

Cogent Economics & Finance

View full text Add to dashboard Cite

Section: Panel Ardl Results For Macroeconomic Determinants Of Mutual Fund Performancesupporting

confidence: 92%

Section: Panel Ardl Results For Macroeconomic Determinants Of Mutual Fund Performancesupporting

confidence: 84%

Macroeconomic determinants of mutual funds performance in Ghana

Gyimah

Addai

Asamoah³

2021

Cogent Economics & Finance

View full text Add to dashboard Cite

“…Empirically, the findings of the study confirm the findings of Udeh (2015) that cash reserve ratio, liquidity ratio and interest rate did not have a significant impact on the profit before tax of Zenith Bank Plc but the minimum rediscount rate was found to have a significant effect on the profit before tax of the bank. It also validates the findings of Ndubuaku et al (2017) who found that monetary policy rate during the post SAP period had significant impact on the total assets value, deposit mobilization, loans and advances and credit to the private sector respectively. Okpara (2009) revealed that the dependent variables were responsible for half of the variations in the returns on assets and the findings of…”

Section: Regression Coefficient and T-statisticssupporting

confidence: 88%

“…However, the minimum rediscount rate was found to have a significant effect on the profit before tax of the bank. Ndubuaku et al (2017) examined the impact of monetary policy regimes on the performance of commercial banks in Nigeria. The paper used Descriptive and Ex-post Facto Research Design.…”

Section: Investment and National Incomementioning

confidence: 99%

Monetary policy variables and return on equity: Empirical evidence of quoted insurance firms in Nigeria

Zaagha

2023

Res. J. Bus. Econ. Manag.

View full text Add to dashboard Cite

This study examined the effect of monetary policy variables and return equity of quoted insurance firms in Nigeria. Secondary data were obtained from the financial statement of 15 quoted insurance firms and the Central Bank of Nigeria Statistical Bulletin. The study modelled return on equity as the dependent variables while money supply, private sector credit, monetary policy rate, treasury bill rate and real interest rate as independent variables. Panel data methodology is employed while the fixed effects model was used as estimation technique at a 5% level of significance. Fixed effects, random effects and pooled estimates were tested while the Hausman test was used to determine the best fit. From the findings, the study conclude that money supply and real interest rate have negative but no significant effect on the return on equity. Monetary policy rate and private sector credit have a positive and significant effect while the Treasury Bill Rate have a positive but no significant effect on the return on equity of the insurance firms. It recommends that the management of the insurance companies should devise measures of managing the negative effect of monetary policy instruments on the performance of the insurance companies and the monetary authorities should harmonize the profitability objectives of the insurance companies with that of monetary policy to avert the negative effect on return on equity of the quoted insurance firms.

show abstract

“…This study takes its source from the linear specifications of Ubi, Lionel and Eyo (2012), Udeh, (2015) Onodugo et al, (2016) and Ndubuaku et al, (2017) However, these specifications are replicated using different variables as stated in my baseline equations as follow. The ARDL form can be given as:…”

Section: Model Specificationmentioning

confidence: 99%

Monetary Policy and Commercial Banks Profitability in Nigeria

Iwedi,

James

2023

JBM

View full text Add to dashboard Cite

This study examines the impact of monetary policy on profitability of commercial banks in Nigeria over the period from 1988 to 2021. Data on credit to deposit ratio, return on asset, return on equity, Z-score, money supply, income per head, interest rate, interest spread, and inflation were obtained from the statistical bulletin of the Central Bank of Nigeria. Autoregressive distributed lag (ARDL) techniques were used to estimate the short and long-term dynamic equilibrium relationship between monetary policy and commercial banks' profitability in Nigeria. The analysis confirms mixed integration through unit root tests, which justifies the use of the ARDL approach for the four baseline models. The estimation results for these models provide evidence of a cointegrating relationship between monetary policy and commercial bank profitability in Nigeria, indicating that all the variables are bound in the long run. Among the indicators of commercial bank profitability, return on asset responds more quickly to changes in monetary policy, compared to return on equity, credit-deposit ratio, and Z-score. The long-term disequilibrium adjustment further supports the presence of a cointegrating relationship among these variables. The estimated level equations demonstrate that money supply and inflation have positive multiplier effects on the bank credit-deposit ratio in the long run. Based on these findings, the study strongly recommends increasing the Z-score of the Nigerian banking sector by reducing the standard deviation of return on asset. The volatility of ROA in the Nigerian banking system contributes to a low Z-score, therefore, bank management teams should strive to maintain relatively stable ROA over time. The government should work on reducing inflation, particularly inflation resulting from reckless spending of public funds, excessive quoting by public officers, and corruption-induced inflation. The interest spread is too wide, and any increase in this margin has a negative impact on return on asset and equity. Accordingly, the study suggests meaningfully shrinking the margin between lending rate and deposit rate, aiming for a one-digit margin. Banks can achieve this by simply reducing lending rates to single digits.

show abstract

Impact of Monetary Policy (Interest Rate) Regimes on the Performance of the Banking Sector in Nigeria

Abstract: This paper examined the impact of monetary policy regimes on the performance of ommercial banks in Nigeria.

Cited by 6 publications

References 10 publications

Macroeconomic determinants of mutual funds performance in Ghana

Macroeconomic determinants of mutual funds performance in Ghana

Monetary policy variables and return on equity: Empirical evidence of quoted insurance firms in Nigeria

Monetary Policy and Commercial Banks Profitability in Nigeria

Contact Info

Product

Resources

About