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Marshal Iwedi

RIVERS STATE UNIVERSITY OF SCIENCE AND TECHNOLOGY, Banking and Finance, Faculty Member

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Dr. Marshal Iwedi is a distinguished lecturer in the Department of Finance at Rivers State University. He boasts an impressive academic background, having earned a B.Sc Degree (Hons) with Second Class Upper Division in Banking and Finance from Michael Okpara University of Agriculture, Umudike. Subsequently, he pursued his passion for Finance and Banking by attaining a Master of Science (M.Sc) Degree from the University of Port Harcourt, further solidifying his expertise in the field.

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Papers by Marshal Iwedi

CAPITAL REGULATORY POLICY AND NON PERFORMING LOANS OF COMMERCIAL BANKS IN NIGERIA

by Edeh M A R K Bekweri and Marshal Iwedi

CAPITAL REGULATORY POLICY AND NON PERFORMING LOANS OF COMMERCIAL BANKS IN NIGERIA, 2023

An efficient and sound financial system is crucial to enhancing sustainable economic growth in an... more An efficient and sound financial system is crucial to enhancing sustainable economic growth in any country, as it provides a balance between those who have funds to invest and those in need of these funds. The creation of credit is a source of revenue for banks just as it makes up the majority of bank's assets. This is however a very risky outcome, as there is the risk of insolvency if less return is earned from its credit portfolio. The interest gotten from risk assets contributes significantly to interest income of banks, and about 85% of banks total income, thus exposing banking business to credit risk. When banks are exposed to high credit risk, it could lead to loans becoming nonperforming and putting banks at high risk. Thus, regulatory policies are established to enable banks and other financial institutions have enough protection when carrying out their functions. In lieu of these, this study is carried out to examine the effect of capital regulatory policies on non-performing loans of commercial banks in Nigeria. Data on a sample of 15 commercial banks quoted on the Nigerian Exchange Group as at 31 st December 2021 were analyzed using the panel regression models. The results showed a positive and significant effect between capital regulatory policies and non-performing loans of commercial banks. The study also showed that banks in Nigeria were able to survive high rate of non-performing loans because they were able to take the policies set out by the regulatory bodies into consideration. Based on the findings, the study advised the need for commercial banks to strictly adhere to the capital regulatory policies of government to be able to operate efficiently and effectively in a harsh economy like Nigeria.

RSU FACULTY OF MANAGEMENT SCIENCES JOURNAL OF INVESTMENT and FINANCE RESEARCH PUBLISHED BY DEPARTMENT OF FINANCE

Digital finance infrastructure and growth of commercial banking firms in Nigeria

This study delves into the intricate relationship between digital finance infrastructure and the ... more This study delves into the intricate relationship between digital finance infrastructure and the growth of commercial banking firms in Nigeria. Through a comprehensive analysis of various financial indicators and statistical tests, we offer critical insights into the dynamics of the Nigerian banking sector. The findings reveal a resilient and steadily growing banking industry, even in the face of economic challenges and the global COVID-19 pandemic. Key highlights include the exponential rise in digital infrastructure, exemplified by the proliferation of Automated Teller Machines (ATMs), Point of Sale (POS) machines, and web banking accounts. These digital channels have significantly influenced the accessibility and convenience of banking services in Nigeria. Our analysis employs correlation, regression, and Granger causality tests to explore the intricate relationships between bank total assets and digital infrastructure components. While positive correlations between bank total assets and digital infrastructure components suggest a strong link between technological expansion and banking growth, the analysis reveals nuanced relationships. Furthermore, while web banking accounts have grown significantly, their influence on bank total assets remains limited. Our findings emphasize the paramount importance of continued investments in digital finance infrastructure for the Nigerian banking sector's growth. However, they also underscore the need for a more profound understanding of the underlying drivers of these trends. This study offers valuable insights for policymakers, financial institutions, and researchers interested in fostering financial inclusion and optimizing digital banking services in Nigeria's ever-evolving financial landscape. In conclusion, this study highlights the critical role of digital finance infrastructure in driving the growth of commercial banking firms in Nigeria, while also calling for more targeted strategies to maximize the benefits of technological advancements in the banking sector. Keywords Digital finance infrastructure • Banking growth • Nigerian banking sector • Point of sale machines (POS) • Web banking impact

Stock market liquidity and economic growth in Nigeria

by Marshal Iwedi and Ifeoluwa I Ogunrinola

This study examines the intricate relationship between stock market liquidity and economic growth... more This study examines the intricate relationship between stock market liquidity and economic growth in Nigeria, offering a comprehensive analysis of data from 1985 to 2022. The research encompasses an exploration of the trends in Real Gross Domestic Product (RGDP), the Number of Deals (NOD), All Share Index (ASI), and Market Capitalization (MCP) in the Nigerian stock market. The key findings of this study reveal a persistent upward trajectory in economic growth in Nigeria, albeit with fluctuations. The Number of Deals (NOD) in the stock market has steadily increased over the years, signifying growing market activity. The All Share Index (ASI) and Market Capitalization (MCP) demonstrated substantial growth trends, emphasizing the stock market's importance in the nation's economic landscape. Cointegration tests reveal a long-term connection between stock market liquidity variables and economic growth, underscoring the stock market's influence on the economy. Regression analyses further establish ASI and MCP's significant and positive impact on economic growth. These results accentuate the stock market's potential as an engine for economic development. Causality tests provided mixed results, with MCP Granger causing NOD and ASI, while other relationships were not statistically significant. The study concludes by recommending the promotion of stock market participation and awareness, strengthening stock market regulations, investment in market infrastructure, diversification of investment options, and encouraging long-term investment strategies. These recommendations aim to capitalize on the positive impact of the stock market on economic growth and foster sustained economic development in Nigeria. This research contributes valuable insights for policymakers, investors, and stakeholders, emphasizing the pivotal role of the stock market in Nigeria's economic growth and development.

JOURNAL OF BANKING AND INVESTMENT PUBLISHED BY DEPARTMENT OF FINANCE, RIVERS STATE UNIVERSITY COPYRIGHT: DEPARTMENT OF FINANCE RIVERS STATE UNIVERSITY

with a purpose of providing a wider reach and readership for the academic research (including pos... more with a purpose of providing a wider reach and readership for the academic research (including postgraduate theses ad dissertations) with the policy and practical implications. it is therefore a vehicle for research works to find top, executives of industries, government departments and international development agencies. Acceptance for publication strongly depends on the article's policy, strategic and operational relevant to enterprise development agencies, industry and government, and theoretical relevance of academic and other knowledge seeking institutions. Innovations literally suggests that deviation from grounded theories and policies will not be basis for rejecting article provided such article demonstrates a clear contribution to knowledge while using acceptable methodology. Originality and depth of analysis are criteria for acceptance too. The journal, which is published half yearly, accepts articles after a successful blind review reports from referees who are not members of the editorial board. A recommendation is required from one member of the editorial board. Manuscripts are invited in the following areas: Banking, Financial intermediaries, bank fraud and operational risk, microeconomics, macroeconomics, international economics and , monetary theory, cooperate finance, strategic financial management, financial policy, private equity finance, microfinance, small business finance, development finance, investment, behavioural finance, financial analysis and valuation, financial econometrics, financial service marketing, project planning and evaluation, portfolio theory, cooperate governance and other areas in mainstream and applied finance.

Digital Banking Technology and the Operational Efficiency of Banks in Nigeria

This paper explores the impact of digital banking technology adoption on the operational efficien... more This paper explores the impact of digital banking technology adoption on the operational efficiency of commercial banking firms in Nigeria. It synthesizes existing literature to establish theoretical frameworks, including Technological Adoption and Operational Efficiency Theory, Customer Experience and Efficiency Enhancement Theory, and Regulatory Compliance and Risk Management Theory. Empirical evidence is provided through quasi-experimental research design utilizing financial time series analysis. Findings indicate a significant and positive relationship between the adoption of digital banking technology and the efficiency of commercial banking firms. Panel unit root tests confirm non-stationarity at the level values of all variables, with stationarity achieved through differencing. Cointegration tests reveal a long-run equilibrium relationship between digital banking technology adoption and banking efficiency. Pairwise Granger causality tests suggest uni-directional causality from electronic fund transfer to operational efficiency. The study concludes that policymakers and stakeholders should prioritize strategies promoting digital banking technology adoption to enhance the efficiency and performance of commercial banking firms in Nigeria.

Financial Inclusion and Economic Growth Nexus in Nigeria

DS Reviews of Commerce and Economics, 2024

This empirical paper investigates the relationship between financial inclusion and economic growt... more This empirical paper investigates the relationship between financial inclusion and economic growth in Nigeria. It draws on the Institutional Theory of Financial Inclusion, Social Capital Theory of Financial Inclusion, and Finance-Growth Nexus Theory as its theoretical foundations. Utilizing annualized data extracted from the Central Bank of Nigeria's Statistical Bulletin (2022), the study employs financial time series methodology, employing Ordinary Least Squares (OLS) and Granger Causality Techniques for comprehensive analysis. The research findings reveal a robust and positive association between financial inclusion and economic growth in Nigeria. Notably, the Granger causality test results establish unidirectional causation from the number of bank branches to Real Gross Domestic Product (RGDP), indicating that as the number of bank branches increases, there is a corresponding augmentation in RGDP. This outcome underscores a discernible cause-and-effect relationship between the two variables. Recognizing the pivotal role of the banking industry in Nigeria's economic development, acting as a crucial channel for monetary transfers within the economy, the study concludes with insightful recommendations that the federal government should facilitate the establishment of low-cost financial centers nationwide, particularly in rural areas, to provide informal banking services to underserved populations. At the same time, operators of automated teller machines should lower transaction fees, thereby fostering increased utilization of ATMs for transactions, thereby reducing dependence on traditional banking methods.

Liquidity Risk Management Practices and Profitability of Banking Firms in Nigeria

Modern Economy and Management

Objective: The objective of this research is to examine how liquidity risk management practices i... more Objective: The objective of this research is to examine how liquidity risk management practices impact the profitability of Nigerian banking institutions. The study utilizes panel data from 1960 to 2021 for analysis. Methods: The study employed financial time series methodology and based on the results of the descriptive analysis and augmented Dickey-Fuller unit root tests for stationarity, the authors employ the Johansen co-integration test to establish the long-run effect of liquidity risk management practices alongside other control factors on profitability of banking firms in Nigeria. The study also examines the short-run relationship between liquidity risk management practices and profitability by estimating the ordinary least square. Results: Based on the result of the descriptive statistics, it is evident that there is a positive relationship between the variations in the mean of the net profit for each of the banks. This result indicates that most of the banks recorded a pro...

Digital Financial Inclusion and Poverty Alleviation in Nigeria

The main objective of this study is to analyze the impact of digital financial inclusion on pover... more The main objective of this study is to analyze the impact of digital financial inclusion on poverty alleviation in Rivers State, Nigeria. The study focused on residents of Rivers State as the target population. Using a combination of multistage and purposive sampling methods, a sample size of 223 participants was selected. Data collection involved the administration of a structured questionnaire, with steps taken to ensure the validity and reliability of the research instrument. The collected data was analyzed using basic descriptive statistics, including tables, frequencies, graphs, and percentages. Hypotheses were tested using simple regression models through SPSS version 25.0 software. Findings showed a significant and positive correlation between mobile money accounts, presence of point-of-sale (POS) machines, frequency of mobile payments, and consumption expenditure in Rivers State. Based on these results, it is concluded that digital financial inclusion plays an important role in poverty alleviation, especially in developing countries like Nigeria. The recommendation is for the Central Bank of Nigeria to enact effective monetary policies to promote financial inclusion and poverty alleviation. In addition, expanding digital financial services in both urban and rural areas and implementing comprehensive financial literacy programs for low-income individuals, especially in rural areas, are suggested to address financial exclusion and reduce poverty levels.

CORPORATE GOVERNANCE AND SOUNDNESS OF BANKING FIRMS IN NIGERIA

by Marshal Iwedi and Edeh M A R K Bekweri

The global financial crisis underscored the imperative to enhance the efficacy of performance and... more The global financial crisis underscored the imperative to enhance the efficacy of performance and corporate governance practices. This is crucial for enabling banks to proactively identify and address potential issues, thereby fortifying their resilience in times of crisis. Given the pivotal and indispensable roles that commercial banks play in the economy, it is imperative that they operate within well-defined standards of governance. This study empirically investigated the impact of corporate governance on the stability of domestically significant banks in Nigeria over the period of thirteen years from 2010 to 2022.Drawing on time series data sourced from the annual reports of these banks and the Nigerian Exchange fact books, the research employed an expo-facto research design. Various analytical techniques were applied, Panel unit root test Hausman test, panel random effect test, Residual cross-section dependence test, and normality test. The panel random effect regression technique was employed to unveil the shortterm effects with a 95% confidence interval. Our findings unequivocally demonstrate a significant relationship between corporate governance variables (namely, Board Representation, Board Size, Audit Committee Independence, Board Activism, and Audit Committee Meetings) and Capital Adequacy of Banking firms in Nigeria. In light of these results, we advocate for the enforcement of robust corporate governance mechanisms within the banking sector to temper the high risk appetite exhibited by directors. Moreover, there is a pressing need for the implementation of more stringent regulatory measures to uphold the regulatory threshold for soundness of domestically significant banks in Nigeria. Additionally, it is imperative that officers of these banks assume direct liability for approved loans, thereby ensuring that only high-quality assets are recorded on their books.

DIGITAL PAYMENT CHANNELS AND ECONOMIC GROWTH IN NIGERIA

Advance Journal of Management, Accounting and Finance, 2024

This study investigates the dynamic interplay between digital payment channels and economic growt... more This study investigates the dynamic interplay between digital payment channels and economic growth in Nigeria, drawing on the theoretical frameworks of financial inclusion, economic growth, and technology-driven efficiency and productivity. Leveraging quarterly data from the Central Bank of Nigeria's Statistical Bulletin (2022), the research employs financial time series methodology, utilizing Ordinary Least Squares (OLS) and Granger Causality Techniques for analysis. The findings reveal distinctive impacts of various digital payment channels on economic growth. Specifically, transactions through Automated Teller Machines (ATMs) and Mobile Banking Apps (MBAs) exhibit positive and statistically significant influences, while Point of Sale (POS) transactions lack significant impact, and Electronic Wallet (EWT) transactions display a negative effect. Granger causality tests indicate past values of these digital payment channels can predict future economic growth, suggesting causal relationships. The study underscores the pivotal role of mobile banking apps and ATMs in driving economic growth, emphasizing the need for enhanced digital infrastructure, widespread financial literacy campaigns, and a supportive regulatory framework. The positive correlation between specific channels and economic growth underscores the transformative potential of digital payment systems in Nigeria. Recommendations include investing in digital infrastructure, promoting financial literacy, formulating conducive regulatory frameworks, and fostering continuous research and innovation in financial technology.

Banking Sector Intermediation and Economic Growth: new evidence from Nigeria

Journal of Arts Humanities and Social Sciences, 2024

This study investigates the nexus between banking sector intermediation and economic growth in Ni... more This study investigates the nexus between banking sector intermediation and economic growth in Nigeria through the lens of traditional time series prediction methods, specifically employing multivariate regressions. Spanning a comprehensive dataset from 1960 to 2022, sourced from the Central Bank of Nigeria, the analysis focuses on three crucial banking intermediation indicators: the Ratio of Private Sector Credit to GDP (RPSC), the Ratio of Currency outside Banks to Broad Money Supply (RCOB), and the Ratio of Total Loan to Total Deposit (RTLD). The research methodology encompasses both descriptive and econometric analytical techniques. Descriptive statistics offer preliminary insights, while econometric techniques, including unit root tests, Vector Autoregressive (VAR) models, and cointegration tests, establish relationships between variables and explore long-term dynamics. The findings reveal significant cointegration among the variables, particularly between banking intermediation indicators and economic growth. Lagged values of banking sector intermediation metrics demonstrate a notable influence on their current values, suggesting potential implications for economic growth. The study recommends further exploration using Vector Error Correction Models (VECM) for a nuanced understanding of the long-term dynamics and causal relationships. The study provides four key recommendations. First, a deeper exploration with VECM is suggested to uncover subtleties in the relationships. Second, policymakers should consider the historical trends of banking intermediation metrics when shaping policies. Third, continuous monitoring of these metrics is essential for anticipating shifts in economic growth trends. Lastly, policy measures are recommended to enhance the efficiency of banking intermediation, focusing on credit allocation, currency management, and loan-to-deposit ratios.

Corporate Risk Management Strategies and Market Value of Quoted Manufacturing Firms in Nigeria

Global Journal of Economic and Finance Research, 2024

This study investigates the impact of corporate risk management strategies on quoted companies in... more This study investigates the impact of corporate risk management strategies on quoted companies in Nigeria, focusing on hedging instruments such as forward contracts, futures contracts, options contracts, and swap contracts. The research aims to analyze how these tools influence a company's market value, contributing to our understanding of their role in shaping financial stability and market perception. Grounded in established hedging theory, the study utilizes a robust data analysis methodology, including fixed effects, random effects, Hausman test, and ordinary least squares (OLS) estimation. Various statistical tests, such as T-statistic, F-test, Durbin Watson test, and corrected R-square, assess variable significance and overall regression validity. The analysis reveals a noteworthy negative correlation between forward contracts and market value, suggesting that an increased reliance on forward contracts is associated with a decrease in market valuation, prompting questions about their efficacy in enhancing market value. In contrast, futures contracts show no significant relationship with market value, emphasizing their role in managing price volatility and ensuring supply chain stability. Options contracts yield mixed results, indicating their complex nature and the need for comprehensive investigation. Conversely, swap contracts consistently demonstrate a significant positive relationship with market value, highlighting their potential as highly effective risk management tools. Based on the findings, the study recommends that firms adopt diversified hedging strategies, conduct thorough risk assessments, strategically employ options contracts, maximize the use of swap contracts, engage in continuous monitoring and adaptation, implement integrated risk management frameworks, collaborate with experts, and maintain a long-term perspective in their risk management strategies.

Domestic Debt Market and Public Investment Decision: Evidence from Nigeria

Journal of Economics and Business Management (GASJEBM), 2024

This study explores the relationship between Nigeria's domestic debt dynamics and public investme... more This study explores the relationship between Nigeria's domestic debt dynamics and public investment decisions, considering their
implications for economic development and fiscal sustainability. Theoretical frameworks from Keynesian economics and the crowding-out
hypothesis provide the foundation for understanding the relationship between domestic debt dynamics and public investment decisions. Empirical
studies offer mixed findings, underscoring the need for context-specific analysis in Nigeria. Despite growing literature, significant gaps remain,
including the lack of comprehensive studies specific to Nigeria's context and the neglect of sectoral differences in investment outcomes. Drawing
on a robust financial time series methodology and secondary data from reputable sources, including the Central Bank of Nigeria, the study covers
the period from 1986 to 2022. Key financial instruments such as Treasury Bonds, Treasury Bills, and Federal Government Bonds are examined
as proxies for domestic debt, while public investment decisions are assessed through expenditures in the public transportation sector. The
methodology employs unit root tests, co-integration analysis, Error Correction Models (ECM), and Granger Causality analysis to explore the
relationship between domestic debt dynamics and public investment decisions. The results indicate significant influences of lagged Treasury Bills,
lagged Federal Government Bonds, and the error correction mechanism on public transportation expenditure. However, the difference in lagged
Treasury Bills does not appear to have a statistically significant effect. The model explains approximately 67.38% of the variation in public
transportation expenditure, with no significant autocorrelation present in the model residuals. In conclusion, the study contributes to understanding
the intricate relationship between domestic debt market dynamics and public investment decisions in Nigeria. It provides evidence-based insights
that can inform policy interventions aimed at promoting fiscal sustainability and economic development.

IMPACT OF MONETARY POLICY ON BANKING SYSTEM FRAGILITY IN NIGERIA

INDIAN JOURNAL OF FINANCE AND ECONOMICS, 2023

This study examines the impact of monetary policy on banking system fragility in Nigeria over the... more This study examines the impact of monetary policy on banking system fragility in Nigeria over the period from 1986 to 2022. The financial time series approach was use to gather secondary data since the variables investigated are quantitative. These variables include bank distressed levels, prime lending rates, maximum lending rates, savings rates, Treasury bill rates, treasury certificate rates, monetary policy rate, narrow money supply, broad money supply and currency ratio. The data for these variables were obtained annually from the Central Bank of Nigeria (CBN) statistical bulletin from 1986 to 2022. Stationarity of the variables was assessed using the Augmented Dickey Fuller (ADF) unit root technique due to the presence of structural breaks. After confirming the mixed integration nature of the variables, they were transformed to first order and modeled using the vector Auto-regression (VAR) based on co-integration tests using the methodology developed by Johansen (1991, 1995). The study found that 16.8% of the changes in the dependent variable could be attributed to variances in Model 1. This assertion is further supported by the F-statistics and the associated probability value. The result for Model II revealed that the Error Correction Model (ECM) is appropriately aligned, and the independent variables can account for 50.3% of the variations in bank distress levels. Similarly, Model three demonstrated that the independent variables can elucidate 48.7% of the variations in bank distress levels. In contrast, in Model 111, the independent variables elucidated a substantial 72.9% of the variance in the dependent variable, whereas in another context, they accounted for 35.5% of the variance. The investigation determined that a noteworthy 88% of the variations in the dependent variable could be linked to the model's variation, a conclusion that is again supported by the F-statistics and probability value. Furthermore, 80.4% and 50% of the variations in the dependent variable could be attributed to the model's.

Liquidity Risk Management Practices and Profitability of Banking Firms in Nigeria

Objective: The objective of this research is to examine how liquidity risk management practices i... more Objective: The objective of this research is to examine how liquidity risk management practices impact the profitability of Nigerian banking institutions. The study utilizes panel data from 1960 to 2021 for analysis. Methods: The study employed financial time series methodology and based on the results of the descriptive analysis and augmented Dickey-Fuller unit root tests for stationarity, the authors employ the Johansen co-integration test to establish the long-run effect of liquidity risk management practices alongside other control factors on profitability of banking firms in Nigeria. The study also examines the short-run relationship between liquidity risk management practices and profitability by estimating the ordinary least square. Results: Based on the result of the descriptive statistics, it is evident that there is a positive relationship between the variations in the mean of the net profit for each of the banks. This result indicates that most of the banks recorded a profit for the year under review. The econometric results show that the current ratio of the banks was within the range of 1.74 to 2.49 indicating that most of the banks under study are well within the desired range and not overstretched as they may not meet the demand of their depositors for withdrawals in the near future. The coefficient of cash ratio in the random effect model is statistically insignificant which indicate that its impact is negligible on the profit margin of the commercial banks. With an R-square value of 0.66, it can be concluded that 66% of the variation in the dependent variable is explained by the independent variables used in the model. The coefficients of the current ratio and cash ratio were statistically insignificant and negatively related to net profits of the banks, this result implies that current and cash ratios have a limited impact on net profits. Conclusion: In conclusion, most Nigerian commercial banks have adequate financial resources to meet their current liabilities this is because they are well capitalized.

Inflation and Capital Structure of Quoted Industrial Goods Manufacturing Firms in Nigeria

This study examined the relationship between inflation and capital structure of industrial goods ... more This study examined the relationship between inflation and capital structure of industrial goods manufacturing firms in Nigeria. The study modelled debt to equity ratio as the function of inflation rate, nominal interest rate and real interest rate. Panel data were sourced from central bank of Nigeria statistical bulletin and financial statement and annual reports of the industrial goods firms from 2012-2021. Panel regression models were formulated to analyze the relationship between inflation and capital structure. The study found from the fixed effect model that 45 percent variation on debt equity ratio of Nigeria quoted industrial goods manufacturing firms can be explaining by variation on real interest rate. The regression coefficient indicated that there is no statistically significant relationship between inflation rates and debt equity ratios of the listed companies in Nigeria; there is no statistical evidence that there is an effect of the consumer price index on the debt equity ratio, and also no statistical evidence that there is a significant effect on the debt equity ratio from the nominal interest rate. However, the debt equity ratio increases with the changes in the nominal interest rate when the industry performance improves. The study concludes that it is advantageous for a company to reduce its debt portfolio and increase its equity holdings to improve its financial condition and its long-term growth when the economy is doing well. For this to happen, however, the company's management must recognize that there are risks when it decides to go the equity route, and therefore it requires them to take a disciplined approach to managing its balance sheet. We recommend that company with high debt levels should consider reducing its debt in order to reduce its borrowing costs and improve its financial strength and it is in the best interest of a company to increase its level of equity financing in order to take advantage of the higher returns that an adequately funded balance sheet can offer.

Capital Market Deepening and Economic Growth in Nigeria

RSU FACULTY OF MANAGEMENT SCIENCES JOURNAL OF INVESTMENT AND FINANCE RESEARCH VOLUME 1, NUMBER 1, , 0

This study was set out to examine the effect of capital market deepening on economic growth in Ni... more This study was set out to examine the effect of capital market deepening on economic growth in Nigeria. Financial time series data were collected from the annual report and accounts of Securities and Exchange Commission and Central Bank of Nigeria statistical bulletin for the duration of 1990 to 2021. The data was analyzed using multiple regression techniques. The results show that capital market deepening variables of market capitalization, all share index, value of transaction and total listing of stock have positive effect on economic growth in Nigeria. The global result shows that 72 percent of the changes in real gross domestic product are explained by joint effects of capital market performance variables. Thus, the study concludes that deepening of the capital market plays a critical and significant positive effect in enhancing economic growth in Nigeria. We recommend the government should invest more and develop the nation's infrastructure in order to create an enabling environment for business to grow and for productivity and efficiency to thrive which will boost economic activities.

MONETARY POLICY AND FINANCIAL SECTOR DEVELOPMENT: EVIDENCE FROM NIGERIA

The research aims to explore how monetary policy impacts the growth of the financial sector in Ni... more The research aims to explore how monetary policy impacts the growth of the financial sector in Nigeria. Financial data spanning from 1981 to 2021 was collected from both the Central Bank of Nigeria and the National Bureau of Statistics. Analytical tools including unit root tests, co-integration tests, regression techniques, and Granger causality tests were employed for analysis. The outcomes of the regression analysis demonstrated that both the monetary policy rate and Treasury bill rates have a detrimental effect on the development of Nigeria's financial sector. Conversely, the exchange rate and inflation rate were found to have a positive influence on the growth of the financial sector. As a result, the study concluded that elements such as money supply, treasury bill rates, monetary policy rate, and exchange rate play a significant role in shaping the development of the financial sector during the study period. In light of these findings, the study suggests that maintaining exchange rate stability is vital for fostering economic growth. Consequently, the study recommends that both governmental authorities and monetary institutions should prioritize exchange rate stability by adopting effective exchange rate policies to ensure a steady and reliable exchange rate.

Monetary Policy and Commercial Banks Profitability in Nigeria

This study examines the impact of monetary policy on profitability of commercial banks in Nigeria... more 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 longterm 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.

CAPITAL REGULATORY POLICY AND NON PERFORMING LOANS OF COMMERCIAL BANKS IN NIGERIA

by Edeh M A R K Bekweri and Marshal Iwedi

CAPITAL REGULATORY POLICY AND NON PERFORMING LOANS OF COMMERCIAL BANKS IN NIGERIA, 2023

An efficient and sound financial system is crucial to enhancing sustainable economic growth in an... more An efficient and sound financial system is crucial to enhancing sustainable economic growth in any country, as it provides a balance between those who have funds to invest and those in need of these funds. The creation of credit is a source of revenue for banks just as it makes up the majority of bank's assets. This is however a very risky outcome, as there is the risk of insolvency if less return is earned from its credit portfolio. The interest gotten from risk assets contributes significantly to interest income of banks, and about 85% of banks total income, thus exposing banking business to credit risk. When banks are exposed to high credit risk, it could lead to loans becoming nonperforming and putting banks at high risk. Thus, regulatory policies are established to enable banks and other financial institutions have enough protection when carrying out their functions. In lieu of these, this study is carried out to examine the effect of capital regulatory policies on non-performing loans of commercial banks in Nigeria. Data on a sample of 15 commercial banks quoted on the Nigerian Exchange Group as at 31 st December 2021 were analyzed using the panel regression models. The results showed a positive and significant effect between capital regulatory policies and non-performing loans of commercial banks. The study also showed that banks in Nigeria were able to survive high rate of non-performing loans because they were able to take the policies set out by the regulatory bodies into consideration. Based on the findings, the study advised the need for commercial banks to strictly adhere to the capital regulatory policies of government to be able to operate efficiently and effectively in a harsh economy like Nigeria.

RSU FACULTY OF MANAGEMENT SCIENCES JOURNAL OF INVESTMENT and FINANCE RESEARCH PUBLISHED BY DEPARTMENT OF FINANCE

Digital finance infrastructure and growth of commercial banking firms in Nigeria

This study delves into the intricate relationship between digital finance infrastructure and the ... more This study delves into the intricate relationship between digital finance infrastructure and the growth of commercial banking firms in Nigeria. Through a comprehensive analysis of various financial indicators and statistical tests, we offer critical insights into the dynamics of the Nigerian banking sector. The findings reveal a resilient and steadily growing banking industry, even in the face of economic challenges and the global COVID-19 pandemic. Key highlights include the exponential rise in digital infrastructure, exemplified by the proliferation of Automated Teller Machines (ATMs), Point of Sale (POS) machines, and web banking accounts. These digital channels have significantly influenced the accessibility and convenience of banking services in Nigeria. Our analysis employs correlation, regression, and Granger causality tests to explore the intricate relationships between bank total assets and digital infrastructure components. While positive correlations between bank total assets and digital infrastructure components suggest a strong link between technological expansion and banking growth, the analysis reveals nuanced relationships. Furthermore, while web banking accounts have grown significantly, their influence on bank total assets remains limited. Our findings emphasize the paramount importance of continued investments in digital finance infrastructure for the Nigerian banking sector's growth. However, they also underscore the need for a more profound understanding of the underlying drivers of these trends. This study offers valuable insights for policymakers, financial institutions, and researchers interested in fostering financial inclusion and optimizing digital banking services in Nigeria's ever-evolving financial landscape. In conclusion, this study highlights the critical role of digital finance infrastructure in driving the growth of commercial banking firms in Nigeria, while also calling for more targeted strategies to maximize the benefits of technological advancements in the banking sector. Keywords Digital finance infrastructure • Banking growth • Nigerian banking sector • Point of sale machines (POS) • Web banking impact

Stock market liquidity and economic growth in Nigeria

by Marshal Iwedi and Ifeoluwa I Ogunrinola

This study examines the intricate relationship between stock market liquidity and economic growth... more This study examines the intricate relationship between stock market liquidity and economic growth in Nigeria, offering a comprehensive analysis of data from 1985 to 2022. The research encompasses an exploration of the trends in Real Gross Domestic Product (RGDP), the Number of Deals (NOD), All Share Index (ASI), and Market Capitalization (MCP) in the Nigerian stock market. The key findings of this study reveal a persistent upward trajectory in economic growth in Nigeria, albeit with fluctuations. The Number of Deals (NOD) in the stock market has steadily increased over the years, signifying growing market activity. The All Share Index (ASI) and Market Capitalization (MCP) demonstrated substantial growth trends, emphasizing the stock market's importance in the nation's economic landscape. Cointegration tests reveal a long-term connection between stock market liquidity variables and economic growth, underscoring the stock market's influence on the economy. Regression analyses further establish ASI and MCP's significant and positive impact on economic growth. These results accentuate the stock market's potential as an engine for economic development. Causality tests provided mixed results, with MCP Granger causing NOD and ASI, while other relationships were not statistically significant. The study concludes by recommending the promotion of stock market participation and awareness, strengthening stock market regulations, investment in market infrastructure, diversification of investment options, and encouraging long-term investment strategies. These recommendations aim to capitalize on the positive impact of the stock market on economic growth and foster sustained economic development in Nigeria. This research contributes valuable insights for policymakers, investors, and stakeholders, emphasizing the pivotal role of the stock market in Nigeria's economic growth and development.

JOURNAL OF BANKING AND INVESTMENT PUBLISHED BY DEPARTMENT OF FINANCE, RIVERS STATE UNIVERSITY COPYRIGHT: DEPARTMENT OF FINANCE RIVERS STATE UNIVERSITY

with a purpose of providing a wider reach and readership for the academic research (including pos... more with a purpose of providing a wider reach and readership for the academic research (including postgraduate theses ad dissertations) with the policy and practical implications. it is therefore a vehicle for research works to find top, executives of industries, government departments and international development agencies. Acceptance for publication strongly depends on the article's policy, strategic and operational relevant to enterprise development agencies, industry and government, and theoretical relevance of academic and other knowledge seeking institutions. Innovations literally suggests that deviation from grounded theories and policies will not be basis for rejecting article provided such article demonstrates a clear contribution to knowledge while using acceptable methodology. Originality and depth of analysis are criteria for acceptance too. The journal, which is published half yearly, accepts articles after a successful blind review reports from referees who are not members of the editorial board. A recommendation is required from one member of the editorial board. Manuscripts are invited in the following areas: Banking, Financial intermediaries, bank fraud and operational risk, microeconomics, macroeconomics, international economics and , monetary theory, cooperate finance, strategic financial management, financial policy, private equity finance, microfinance, small business finance, development finance, investment, behavioural finance, financial analysis and valuation, financial econometrics, financial service marketing, project planning and evaluation, portfolio theory, cooperate governance and other areas in mainstream and applied finance.

Digital Banking Technology and the Operational Efficiency of Banks in Nigeria

This paper explores the impact of digital banking technology adoption on the operational efficien... more This paper explores the impact of digital banking technology adoption on the operational efficiency of commercial banking firms in Nigeria. It synthesizes existing literature to establish theoretical frameworks, including Technological Adoption and Operational Efficiency Theory, Customer Experience and Efficiency Enhancement Theory, and Regulatory Compliance and Risk Management Theory. Empirical evidence is provided through quasi-experimental research design utilizing financial time series analysis. Findings indicate a significant and positive relationship between the adoption of digital banking technology and the efficiency of commercial banking firms. Panel unit root tests confirm non-stationarity at the level values of all variables, with stationarity achieved through differencing. Cointegration tests reveal a long-run equilibrium relationship between digital banking technology adoption and banking efficiency. Pairwise Granger causality tests suggest uni-directional causality from electronic fund transfer to operational efficiency. The study concludes that policymakers and stakeholders should prioritize strategies promoting digital banking technology adoption to enhance the efficiency and performance of commercial banking firms in Nigeria.

Financial Inclusion and Economic Growth Nexus in Nigeria

DS Reviews of Commerce and Economics, 2024

This empirical paper investigates the relationship between financial inclusion and economic growt... more This empirical paper investigates the relationship between financial inclusion and economic growth in Nigeria. It draws on the Institutional Theory of Financial Inclusion, Social Capital Theory of Financial Inclusion, and Finance-Growth Nexus Theory as its theoretical foundations. Utilizing annualized data extracted from the Central Bank of Nigeria's Statistical Bulletin (2022), the study employs financial time series methodology, employing Ordinary Least Squares (OLS) and Granger Causality Techniques for comprehensive analysis. The research findings reveal a robust and positive association between financial inclusion and economic growth in Nigeria. Notably, the Granger causality test results establish unidirectional causation from the number of bank branches to Real Gross Domestic Product (RGDP), indicating that as the number of bank branches increases, there is a corresponding augmentation in RGDP. This outcome underscores a discernible cause-and-effect relationship between the two variables. Recognizing the pivotal role of the banking industry in Nigeria's economic development, acting as a crucial channel for monetary transfers within the economy, the study concludes with insightful recommendations that the federal government should facilitate the establishment of low-cost financial centers nationwide, particularly in rural areas, to provide informal banking services to underserved populations. At the same time, operators of automated teller machines should lower transaction fees, thereby fostering increased utilization of ATMs for transactions, thereby reducing dependence on traditional banking methods.

Liquidity Risk Management Practices and Profitability of Banking Firms in Nigeria

Modern Economy and Management

Objective: The objective of this research is to examine how liquidity risk management practices i... more Objective: The objective of this research is to examine how liquidity risk management practices impact the profitability of Nigerian banking institutions. The study utilizes panel data from 1960 to 2021 for analysis. Methods: The study employed financial time series methodology and based on the results of the descriptive analysis and augmented Dickey-Fuller unit root tests for stationarity, the authors employ the Johansen co-integration test to establish the long-run effect of liquidity risk management practices alongside other control factors on profitability of banking firms in Nigeria. The study also examines the short-run relationship between liquidity risk management practices and profitability by estimating the ordinary least square. Results: Based on the result of the descriptive statistics, it is evident that there is a positive relationship between the variations in the mean of the net profit for each of the banks. This result indicates that most of the banks recorded a pro...

Digital Financial Inclusion and Poverty Alleviation in Nigeria

The main objective of this study is to analyze the impact of digital financial inclusion on pover... more The main objective of this study is to analyze the impact of digital financial inclusion on poverty alleviation in Rivers State, Nigeria. The study focused on residents of Rivers State as the target population. Using a combination of multistage and purposive sampling methods, a sample size of 223 participants was selected. Data collection involved the administration of a structured questionnaire, with steps taken to ensure the validity and reliability of the research instrument. The collected data was analyzed using basic descriptive statistics, including tables, frequencies, graphs, and percentages. Hypotheses were tested using simple regression models through SPSS version 25.0 software. Findings showed a significant and positive correlation between mobile money accounts, presence of point-of-sale (POS) machines, frequency of mobile payments, and consumption expenditure in Rivers State. Based on these results, it is concluded that digital financial inclusion plays an important role in poverty alleviation, especially in developing countries like Nigeria. The recommendation is for the Central Bank of Nigeria to enact effective monetary policies to promote financial inclusion and poverty alleviation. In addition, expanding digital financial services in both urban and rural areas and implementing comprehensive financial literacy programs for low-income individuals, especially in rural areas, are suggested to address financial exclusion and reduce poverty levels.

CORPORATE GOVERNANCE AND SOUNDNESS OF BANKING FIRMS IN NIGERIA

by Marshal Iwedi and Edeh M A R K Bekweri

The global financial crisis underscored the imperative to enhance the efficacy of performance and... more The global financial crisis underscored the imperative to enhance the efficacy of performance and corporate governance practices. This is crucial for enabling banks to proactively identify and address potential issues, thereby fortifying their resilience in times of crisis. Given the pivotal and indispensable roles that commercial banks play in the economy, it is imperative that they operate within well-defined standards of governance. This study empirically investigated the impact of corporate governance on the stability of domestically significant banks in Nigeria over the period of thirteen years from 2010 to 2022.Drawing on time series data sourced from the annual reports of these banks and the Nigerian Exchange fact books, the research employed an expo-facto research design. Various analytical techniques were applied, Panel unit root test Hausman test, panel random effect test, Residual cross-section dependence test, and normality test. The panel random effect regression technique was employed to unveil the shortterm effects with a 95% confidence interval. Our findings unequivocally demonstrate a significant relationship between corporate governance variables (namely, Board Representation, Board Size, Audit Committee Independence, Board Activism, and Audit Committee Meetings) and Capital Adequacy of Banking firms in Nigeria. In light of these results, we advocate for the enforcement of robust corporate governance mechanisms within the banking sector to temper the high risk appetite exhibited by directors. Moreover, there is a pressing need for the implementation of more stringent regulatory measures to uphold the regulatory threshold for soundness of domestically significant banks in Nigeria. Additionally, it is imperative that officers of these banks assume direct liability for approved loans, thereby ensuring that only high-quality assets are recorded on their books.

DIGITAL PAYMENT CHANNELS AND ECONOMIC GROWTH IN NIGERIA

Advance Journal of Management, Accounting and Finance, 2024

This study investigates the dynamic interplay between digital payment channels and economic growt... more This study investigates the dynamic interplay between digital payment channels and economic growth in Nigeria, drawing on the theoretical frameworks of financial inclusion, economic growth, and technology-driven efficiency and productivity. Leveraging quarterly data from the Central Bank of Nigeria's Statistical Bulletin (2022), the research employs financial time series methodology, utilizing Ordinary Least Squares (OLS) and Granger Causality Techniques for analysis. The findings reveal distinctive impacts of various digital payment channels on economic growth. Specifically, transactions through Automated Teller Machines (ATMs) and Mobile Banking Apps (MBAs) exhibit positive and statistically significant influences, while Point of Sale (POS) transactions lack significant impact, and Electronic Wallet (EWT) transactions display a negative effect. Granger causality tests indicate past values of these digital payment channels can predict future economic growth, suggesting causal relationships. The study underscores the pivotal role of mobile banking apps and ATMs in driving economic growth, emphasizing the need for enhanced digital infrastructure, widespread financial literacy campaigns, and a supportive regulatory framework. The positive correlation between specific channels and economic growth underscores the transformative potential of digital payment systems in Nigeria. Recommendations include investing in digital infrastructure, promoting financial literacy, formulating conducive regulatory frameworks, and fostering continuous research and innovation in financial technology.

Banking Sector Intermediation and Economic Growth: new evidence from Nigeria

Journal of Arts Humanities and Social Sciences, 2024

This study investigates the nexus between banking sector intermediation and economic growth in Ni... more This study investigates the nexus between banking sector intermediation and economic growth in Nigeria through the lens of traditional time series prediction methods, specifically employing multivariate regressions. Spanning a comprehensive dataset from 1960 to 2022, sourced from the Central Bank of Nigeria, the analysis focuses on three crucial banking intermediation indicators: the Ratio of Private Sector Credit to GDP (RPSC), the Ratio of Currency outside Banks to Broad Money Supply (RCOB), and the Ratio of Total Loan to Total Deposit (RTLD). The research methodology encompasses both descriptive and econometric analytical techniques. Descriptive statistics offer preliminary insights, while econometric techniques, including unit root tests, Vector Autoregressive (VAR) models, and cointegration tests, establish relationships between variables and explore long-term dynamics. The findings reveal significant cointegration among the variables, particularly between banking intermediation indicators and economic growth. Lagged values of banking sector intermediation metrics demonstrate a notable influence on their current values, suggesting potential implications for economic growth. The study recommends further exploration using Vector Error Correction Models (VECM) for a nuanced understanding of the long-term dynamics and causal relationships. The study provides four key recommendations. First, a deeper exploration with VECM is suggested to uncover subtleties in the relationships. Second, policymakers should consider the historical trends of banking intermediation metrics when shaping policies. Third, continuous monitoring of these metrics is essential for anticipating shifts in economic growth trends. Lastly, policy measures are recommended to enhance the efficiency of banking intermediation, focusing on credit allocation, currency management, and loan-to-deposit ratios.

Corporate Risk Management Strategies and Market Value of Quoted Manufacturing Firms in Nigeria

Global Journal of Economic and Finance Research, 2024

This study investigates the impact of corporate risk management strategies on quoted companies in... more This study investigates the impact of corporate risk management strategies on quoted companies in Nigeria, focusing on hedging instruments such as forward contracts, futures contracts, options contracts, and swap contracts. The research aims to analyze how these tools influence a company's market value, contributing to our understanding of their role in shaping financial stability and market perception. Grounded in established hedging theory, the study utilizes a robust data analysis methodology, including fixed effects, random effects, Hausman test, and ordinary least squares (OLS) estimation. Various statistical tests, such as T-statistic, F-test, Durbin Watson test, and corrected R-square, assess variable significance and overall regression validity. The analysis reveals a noteworthy negative correlation between forward contracts and market value, suggesting that an increased reliance on forward contracts is associated with a decrease in market valuation, prompting questions about their efficacy in enhancing market value. In contrast, futures contracts show no significant relationship with market value, emphasizing their role in managing price volatility and ensuring supply chain stability. Options contracts yield mixed results, indicating their complex nature and the need for comprehensive investigation. Conversely, swap contracts consistently demonstrate a significant positive relationship with market value, highlighting their potential as highly effective risk management tools. Based on the findings, the study recommends that firms adopt diversified hedging strategies, conduct thorough risk assessments, strategically employ options contracts, maximize the use of swap contracts, engage in continuous monitoring and adaptation, implement integrated risk management frameworks, collaborate with experts, and maintain a long-term perspective in their risk management strategies.

Domestic Debt Market and Public Investment Decision: Evidence from Nigeria

Journal of Economics and Business Management (GASJEBM), 2024

This study explores the relationship between Nigeria's domestic debt dynamics and public investme... more This study explores the relationship between Nigeria's domestic debt dynamics and public investment decisions, considering their
implications for economic development and fiscal sustainability. Theoretical frameworks from Keynesian economics and the crowding-out
hypothesis provide the foundation for understanding the relationship between domestic debt dynamics and public investment decisions. Empirical
studies offer mixed findings, underscoring the need for context-specific analysis in Nigeria. Despite growing literature, significant gaps remain,
including the lack of comprehensive studies specific to Nigeria's context and the neglect of sectoral differences in investment outcomes. Drawing
on a robust financial time series methodology and secondary data from reputable sources, including the Central Bank of Nigeria, the study covers
the period from 1986 to 2022. Key financial instruments such as Treasury Bonds, Treasury Bills, and Federal Government Bonds are examined
as proxies for domestic debt, while public investment decisions are assessed through expenditures in the public transportation sector. The
methodology employs unit root tests, co-integration analysis, Error Correction Models (ECM), and Granger Causality analysis to explore the
relationship between domestic debt dynamics and public investment decisions. The results indicate significant influences of lagged Treasury Bills,
lagged Federal Government Bonds, and the error correction mechanism on public transportation expenditure. However, the difference in lagged
Treasury Bills does not appear to have a statistically significant effect. The model explains approximately 67.38% of the variation in public
transportation expenditure, with no significant autocorrelation present in the model residuals. In conclusion, the study contributes to understanding
the intricate relationship between domestic debt market dynamics and public investment decisions in Nigeria. It provides evidence-based insights
that can inform policy interventions aimed at promoting fiscal sustainability and economic development.

IMPACT OF MONETARY POLICY ON BANKING SYSTEM FRAGILITY IN NIGERIA

INDIAN JOURNAL OF FINANCE AND ECONOMICS, 2023

This study examines the impact of monetary policy on banking system fragility in Nigeria over the... more This study examines the impact of monetary policy on banking system fragility in Nigeria over the period from 1986 to 2022. The financial time series approach was use to gather secondary data since the variables investigated are quantitative. These variables include bank distressed levels, prime lending rates, maximum lending rates, savings rates, Treasury bill rates, treasury certificate rates, monetary policy rate, narrow money supply, broad money supply and currency ratio. The data for these variables were obtained annually from the Central Bank of Nigeria (CBN) statistical bulletin from 1986 to 2022. Stationarity of the variables was assessed using the Augmented Dickey Fuller (ADF) unit root technique due to the presence of structural breaks. After confirming the mixed integration nature of the variables, they were transformed to first order and modeled using the vector Auto-regression (VAR) based on co-integration tests using the methodology developed by Johansen (1991, 1995). The study found that 16.8% of the changes in the dependent variable could be attributed to variances in Model 1. This assertion is further supported by the F-statistics and the associated probability value. The result for Model II revealed that the Error Correction Model (ECM) is appropriately aligned, and the independent variables can account for 50.3% of the variations in bank distress levels. Similarly, Model three demonstrated that the independent variables can elucidate 48.7% of the variations in bank distress levels. In contrast, in Model 111, the independent variables elucidated a substantial 72.9% of the variance in the dependent variable, whereas in another context, they accounted for 35.5% of the variance. The investigation determined that a noteworthy 88% of the variations in the dependent variable could be linked to the model's variation, a conclusion that is again supported by the F-statistics and probability value. Furthermore, 80.4% and 50% of the variations in the dependent variable could be attributed to the model's.

Liquidity Risk Management Practices and Profitability of Banking Firms in Nigeria

Objective: The objective of this research is to examine how liquidity risk management practices i... more Objective: The objective of this research is to examine how liquidity risk management practices impact the profitability of Nigerian banking institutions. The study utilizes panel data from 1960 to 2021 for analysis. Methods: The study employed financial time series methodology and based on the results of the descriptive analysis and augmented Dickey-Fuller unit root tests for stationarity, the authors employ the Johansen co-integration test to establish the long-run effect of liquidity risk management practices alongside other control factors on profitability of banking firms in Nigeria. The study also examines the short-run relationship between liquidity risk management practices and profitability by estimating the ordinary least square. Results: Based on the result of the descriptive statistics, it is evident that there is a positive relationship between the variations in the mean of the net profit for each of the banks. This result indicates that most of the banks recorded a profit for the year under review. The econometric results show that the current ratio of the banks was within the range of 1.74 to 2.49 indicating that most of the banks under study are well within the desired range and not overstretched as they may not meet the demand of their depositors for withdrawals in the near future. The coefficient of cash ratio in the random effect model is statistically insignificant which indicate that its impact is negligible on the profit margin of the commercial banks. With an R-square value of 0.66, it can be concluded that 66% of the variation in the dependent variable is explained by the independent variables used in the model. The coefficients of the current ratio and cash ratio were statistically insignificant and negatively related to net profits of the banks, this result implies that current and cash ratios have a limited impact on net profits. Conclusion: In conclusion, most Nigerian commercial banks have adequate financial resources to meet their current liabilities this is because they are well capitalized.

Inflation and Capital Structure of Quoted Industrial Goods Manufacturing Firms in Nigeria

This study examined the relationship between inflation and capital structure of industrial goods ... more This study examined the relationship between inflation and capital structure of industrial goods manufacturing firms in Nigeria. The study modelled debt to equity ratio as the function of inflation rate, nominal interest rate and real interest rate. Panel data were sourced from central bank of Nigeria statistical bulletin and financial statement and annual reports of the industrial goods firms from 2012-2021. Panel regression models were formulated to analyze the relationship between inflation and capital structure. The study found from the fixed effect model that 45 percent variation on debt equity ratio of Nigeria quoted industrial goods manufacturing firms can be explaining by variation on real interest rate. The regression coefficient indicated that there is no statistically significant relationship between inflation rates and debt equity ratios of the listed companies in Nigeria; there is no statistical evidence that there is an effect of the consumer price index on the debt equity ratio, and also no statistical evidence that there is a significant effect on the debt equity ratio from the nominal interest rate. However, the debt equity ratio increases with the changes in the nominal interest rate when the industry performance improves. The study concludes that it is advantageous for a company to reduce its debt portfolio and increase its equity holdings to improve its financial condition and its long-term growth when the economy is doing well. For this to happen, however, the company's management must recognize that there are risks when it decides to go the equity route, and therefore it requires them to take a disciplined approach to managing its balance sheet. We recommend that company with high debt levels should consider reducing its debt in order to reduce its borrowing costs and improve its financial strength and it is in the best interest of a company to increase its level of equity financing in order to take advantage of the higher returns that an adequately funded balance sheet can offer.

Capital Market Deepening and Economic Growth in Nigeria

RSU FACULTY OF MANAGEMENT SCIENCES JOURNAL OF INVESTMENT AND FINANCE RESEARCH VOLUME 1, NUMBER 1, , 0

This study was set out to examine the effect of capital market deepening on economic growth in Ni... more This study was set out to examine the effect of capital market deepening on economic growth in Nigeria. Financial time series data were collected from the annual report and accounts of Securities and Exchange Commission and Central Bank of Nigeria statistical bulletin for the duration of 1990 to 2021. The data was analyzed using multiple regression techniques. The results show that capital market deepening variables of market capitalization, all share index, value of transaction and total listing of stock have positive effect on economic growth in Nigeria. The global result shows that 72 percent of the changes in real gross domestic product are explained by joint effects of capital market performance variables. Thus, the study concludes that deepening of the capital market plays a critical and significant positive effect in enhancing economic growth in Nigeria. We recommend the government should invest more and develop the nation's infrastructure in order to create an enabling environment for business to grow and for productivity and efficiency to thrive which will boost economic activities.

MONETARY POLICY AND FINANCIAL SECTOR DEVELOPMENT: EVIDENCE FROM NIGERIA

The research aims to explore how monetary policy impacts the growth of the financial sector in Ni... more The research aims to explore how monetary policy impacts the growth of the financial sector in Nigeria. Financial data spanning from 1981 to 2021 was collected from both the Central Bank of Nigeria and the National Bureau of Statistics. Analytical tools including unit root tests, co-integration tests, regression techniques, and Granger causality tests were employed for analysis. The outcomes of the regression analysis demonstrated that both the monetary policy rate and Treasury bill rates have a detrimental effect on the development of Nigeria's financial sector. Conversely, the exchange rate and inflation rate were found to have a positive influence on the growth of the financial sector. As a result, the study concluded that elements such as money supply, treasury bill rates, monetary policy rate, and exchange rate play a significant role in shaping the development of the financial sector during the study period. In light of these findings, the study suggests that maintaining exchange rate stability is vital for fostering economic growth. Consequently, the study recommends that both governmental authorities and monetary institutions should prioritize exchange rate stability by adopting effective exchange rate policies to ensure a steady and reliable exchange rate.

Monetary Policy and Commercial Banks Profitability in Nigeria

This study examines the impact of monetary policy on profitability of commercial banks in Nigeria... more 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 longterm 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.