Faculty of Management Sciences, Federal University Otuoke
FEDERAL UNIVERSITY OTUOKE
MENU
Gladys Anwuli NWOKOYE (PhD.) & Daniel Ayegbeni ULOKOAGA
This paper sought to investigate the effect of interbank transactions on the performance of some selected quoted deposit money banks in Nigeria. In doing this, we considered all the quoted banks with relevant data in the banking sector that have consistently published their audited annual financial report up to 31st December, 2018. Thus, the analysis scope covers the period (2006-2015). We employed a sample of one hundred and forty (140) observations to ensure adequate observations for statistical testing - we adjusted an unbalanced panel data analysis due to the cross sectional nature of available data. The performance of these banks was measured in terms of returns on assets (RETOA) and net interest margin (GPMAG). We used panel data regression techniques, and the Hausman test was conducted on two unbalanced panel data models. Thereafter, two models were specified and estimated after certifying the normality of the data in the variables in the model. In the respective models, the performance of these banks was measured in terms of RETOA in model I and GPMAG in model II. And based on the outcome, the random effect result was prefer for model I while the fixed effect was preferred in model II. Empirical evidence indicates that interbank transactions is measured by interbank loan and deposit both exert positively on performance as measured by RETOA in model I though in an insignificant manner while in model II, interbank loan and interbank deposit impact positively and negatively respectively on performance as measured by GPMAG though in an insignificant manner too. Based on the outcome of this study, it implies that most quoted banks do not seem to partake in interbank transactions which are expected to impact positively on performance. We therefore recommend that banks should consider interbank loan and deposit relationships as less risky investment options and therefore learn to trust their sister banks to improving their performance.
Editorial
Published: 23 Dec 2019
INTERBANK TRANSACTIONS AND PERFORMANCE OF NIGERIAN BANKS
30-47 (2019)
Abstract
Author Information
Affiliations
Department of Banking and Finance, University of Benin, Benin City, Nigeria.
Gladys Anwuli NWOKOYE (PhD.)
Corresponding Author
Gladys Anwuli NWOKOYE
Cite this article
Gladys Anwuli NWOKOYE & Daniel Ayegbeni ULOKOAGA (2019). Interbank Transactions and Performance of Nigerian Banks. Otuoke Journal of Management Sciences, 4(2) 30 - 47.
Rights and Permissions
Open Access This article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. The images or other third party material in this article are included in the article's Creative Commons licence, unless indicated otherwise in a credit line to the material. If material is not included in the article's Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder. To view a copy of this licence, visit http://creativecommons.org/licenses/by/4.0/.
Download PDF
Daniel Ayegbeni ULOKOAGA
Department of Banking and Finance, University of Benin, Benin City, Nigeria.