Effect of Monetary Policy on Financial Performance of Deposit Money Banks in Nigeria

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EFFECT OF MONETARY POLICY ON FINANCIAL PERFORMANCE OF DEPOSIT MONEY BANKS IN NIGERIA

  • PROJECT YEAR: 2021
  • NUMBER OF PAGES: 60
  • FILE TYPE: DOC
  • DEGREE: BSC
  • DEPARTMENT: DEPARTMENT OF ACCOUNTING
    FACULTY OF ADMINISTRATION
Category:

ABSTRACT

The main objective of the study is to determine the impact of monetary policy on financial performance of deposit money banks in Nigeria spanning the period 1990 to 2019. Specifically, the study examined effect of Monetary Policy Rate (MPR), Lending Rate (LR), Deposit Rate (DR) and Treasury Bill Rate (TBR) on profitability of listed Deposit Money Banks in Nigeria. With aid of panel data regression technique, the study finds that both Monetary Policy Rate and Deposit Rate had negative but statistically significant relationship with Deposit Money Banks in Nigeria. Lending Rate had a positive and statistically significant relationship with Deposit Money Banks in Nigeria while Treasury Bill Rate had an insignificant negative relationship with Deposit Money Banks in Nigeria. From the findings of the study, the study concludes that the joint impact of interest rates on profitability of Deposit Money Banks in Nigeria seems to very be strong and significantly influence the profitability of listed Deposit Money Banks in Nigeria. In light of the above results, the study recommends that bank managers or management should identify any adverse or hostile factors influencing bank financial performance and hedge against them. Also, there should be laid down policies and implementation strategies that should encourage banks to further adopt technologies which drives financial inclusion and also to ensure that Nigerians are captured in the financial system as this will result to the growth and development of the country.

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