Vol 6, No 4 (2018)
Corporate Governance and Banking Sector Performance in Nigeria
Dosunmu Adebukola Ibitamuno, Okey Onuchuku, Alwell Nteegah
Abstract
This study investigates the effect of corporate governance on the performance of banks in Nigeria over the period 2012-2016. To achieve the purpose of the study data on corporate governance proxy by board size, executive and non-executive board members, interest rate margin, profit level and Return on Asset (ROA) of 15 deposit banks in Nigeria were sourced from the CBN and the records of the banks and analysed using panel technique. The results indicated that none of the variables that represents corporate governance was significant in explaining changes in the performance of banks. This implies that corporate governance has less implication on the performance of banks in Nigeria. The result also shows that board size and non-executive board members have negative effect on ROA while executive board members have positive effect on the performance of banks over the period of this study. The implication of this result is that increase in executive members of a bank’s board could improve the performance of the bank in Nigeria. Other variables like interest rate margin and profit level were also insignificant in explaining changes in the performance (ROA) of banks. The result further revealed that the effect of corporate governance on banks ‘performance differs across the banks in Nigeria. Based on this result, the study recommends: an upward review of executive members of the board of banks and a periodic review of guidelines on the management of banks in order to enhance efficiency in management of banks and their performance.
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Keywords
Return on Asset; Corporate governance; Board size; Interest rate margin and profit.
Publication information
Volume 6, Issue 4
Year of Publication: 2018
ISSN: 1857 - 8721
Publisher: EDNOTERA
How to cite
Adebukola Ibitamuno, D., Onuchuku, O., Nteegah, A.: Corporate Governance and Banking Sector Performance in Nigeria. Journal of Applied Economics and Business, Vol 6, No. 4, 35-50. (2018)