Industry Convergence and Quality of Assets in the Nigerian Banking Sector
Keywords:
Financial institutions, financial intermediation, industry convergenceAbstract
The aim of the research was to assess the implications of industry convergence on the Nigerian banks’ assets quality. The exact aims of the research were to: determine the degree to which capital adequacy ratio brought by industry convergence influences on the quality of banks assets in Nigeria; examine the effect of liquidity ratio brought on the quality of bank assets in Nigeria by industry convergence; ascertain the extent of influence of costs of intermediation brought on the Nigerian banks’ assets quality by industry convergence. Using ex-post facto research design, the data regression technique was engaged by econometric view. The results recognized that capital adequacy ratio, quality of assets of Nigerian banks are significantly affected by liquidity ratio as well as the cost of intermediation, as a result, suggests that: capital adequacy ratios should be periodically increased by Nigerian central bank as it contributes to better quality of asset.
Downloads
References
Abata, M.A. (2014). Assets quality and bank performance: A research of commercial banks in Nigerian. Research Journal of Finance and Accounting, 5(18), 39- 44.
Afzal, A.,& Mirza, N. (2012). Size, diversification and risk: Preliminary Guidance from commercial banks in Pakistan. Pakistan Journal of Commerce and Social Science, 6(2),282-296.
Altunbas, Y., Carbo, S., Gardener, E.P.M.,&Molyneux, P. (2007). Examining the relationship between capital, risk and efficiency in European Banking.European Financial Management, 13(1), 49-70.
Andries, A.M., &Capraru, B. (2012). Competition and Efficiency in EU27 Banking System Baltic. Journal of Economics, 12(1), 41 – 60.
Barr, R.S.,&Seims, T.F. (1994).Predicting bank failure using DEA to quantify management quality. Federal Reserve Bank of Dallas, Financial Industry Researches Working Paper No.1-94.
Basu, P. (2008).Improving Access to Finance for India’s Rural Poor. The International Bank for Reconstruction and development/the World Bank Publication.
CBN (2004).Measurement of capital adequacy along international standard,Lagos.
CBN (2005).Guidelines and incentives on consolidation in the Nigerian Banking Industry Press Release – April 11, 2005 on Banking Sector Consolidation: Special Incentive to Encourage Weaker Banks.
CBN (2009).Central Bank of Nigeria Statistical Bulletin, Abuja: CBN Publications.
CBN (2010).Central Bank of Nigeria Statistical Bulletin, Abuja: CBN Publications.
CBN (2013).Guidance notes on the Calculation of Regulation Capital.
Chirwa, E.W.,&Mlachula, M. (2004). Financial reforms and interest rate spreads in the commercial banking system in Malawi.IMF Staff Papers, 51(1), 96- 122.
Dabla-Norris, E.,&Floerkemeir, H. (2007). Bank Efficiency and Market Structure: What Determines Baking Spreads in Armenia? IMF Working paper, 1- 28.
Dang, U. (2011).The camel rating system in banking supervision: A case research.International Business Degree thesis, Avcada University of Applied Sciences.
Das, K.K., Panda, P., & Mishra, S. (2020). Issues and challenges for Indian Banking Sector due to convergence with IFRS.
De-Bock, R.,&Demyanets, A. (2012). Bank Asset Quality in Emerging Markets: Determinants and Spillovers. IMF Working Paper, 12 (71), 1- 25.
Dell’ Ariccia, G., & Marques, R. (2004). Information and Bank Credit Allocation, Journal of financial Economics, 72(1),185-214.
Demirguc-Kunt, A. (1998). The determinants of banking crises in developing and developed countries. IMF Staff Papers,45, 81-109.
Demirguc-Kunt, A.,& Huizinga, H. (1999). Determinant of commercial bank interest Margins and Profitability: Some International Evidence. The World Bank Economics Review, 13(2),379- 408.
Demirguc-Kunt, A.,&Merrouche, O. (2003). Bank Capital: Lesson from the financial Crisis. Journal of Money, Credit and Banking, 45(6),1147-1164.
Dickson, P.,&Mutagu, M. (2013). The Influence of Capital Adequacy on Asset Quality position of banks in Tanzania. InternationalJournal of Economics and Finance, 5(2),179- 194.
Ezeoha, A. E. (2011). Banking Consolidation, Credit Crisis and Asset Quality in A Fragile Braking System, some Evidence from Nigerian data. Journal of Financial Regulation and compliance, 19(1), 33 – 44.
Fein, M.L. (2007).The convergence of financial products and the implications for regulatory convergence. A Paper Presented @ a symposium: Can we Improve Policy Making in Financial Service Regulation American Enterprise Institute, Washington, D.C 1- 26.
Goddard, J., Liu, H., Molyneux, P.,&Wilson, J.O.S. (2013). Do bank profits converge? European Financial Management, 19 (2), 345-365.
Haruna, M.A. (2012). Determinates of cost of financial intermediation in Nigeria pre consolidated banking sector. International Journal of Advanced Research in Management and Social Sciences, 1(2), 180- 194.
Iannotta, G., Nocera, G., &Sironi, A. (2007). Ownership structure, risk and performance in the European banking industry. Journal of Banking &Finance, 31(7), 2127-2149.
Idries, M.A. (2010). Cost of Financial Intermediation in the Banking Sector of Jordan, International Research Journal of Finance and Economics,56, 7- 21.
Izzeldin, M., Johnes, J., Ongena, S., Pappas, V., &Tsionas, M. (2021). Efficiency convergence in Islamic and conventional banks. Journal of International Financial Markets, Institutions and Money, 70, 101279.
Khalid, A.C. (2012). The impact of asset quality on profitability of private banks in India Journal of African Macroeconomic Review, 2(1), 126- 146.
Klein, N. (2013). Non-Performing Loans in CESEE: Determinants and Impact on Macroeconomic Performance. IMF Working Paper, WP/13/72, 1-27
Lee, S. (2008).Ownership structure and financial performance: Evidence from panel data of South Korea. Working Paper 17, University of Utah, Department of Economics.
Lind, Y. (2004). Convergence: History of term usage and lessons for firms’ strategists. Proceedings of 15th Biennial ITS Conference, September (2004), Berlin.
Miles, D., Yang, I.,&Marcheggiano, G. (2013). Optimal bank capital. The Economic Journal, 123(567), 68-81.
Mudos J.,& Solis, L. (2009). The determinants of net interest income in the Mexican banking system: An Integrated model. Journal of Banking and Finance, 33(10), 1920-1931.
Naceur, S.B.,&Kandil, M. (2009). The impact of capital requirement of banks’ cost of intermediation and performance: The case of Egypt. Working Paper Series, 430, 1 – 26
NDIC (2006). Deposit insurance and you-finance services regulations. NDIC Annual Publication 2006, 1-9.
Olson, D., &Zoubi, T. (2017). Convergence in bank performance for commercial and Islamic banks during and after the Global Financial Crisis. The Quarterly Review of Economics and Finance, 6(5), 71-87.
Ongore, V.O.,&Kusa, G.B. (2013). Determinants of financial performance of commercial banks in Kenya. Internationals Journal of Economics and Financial Issues,3(1),237- 252.
Sampler, J.I. (1998).Redefring Industry Structure for the Information age. Strategic Management Journal, 19(4), 343-355.
Sare, Y.A., Opoku, E.E.O., Ibrahim, M., &Koomson, I. (2019). Financial sector development convergence in Africa: Evidence from bank-and market-based measures. Economics and Business Letters, 8(4), 166-175.
Stiglitz, J.,& Weiss, A. (1981). Credit rationing in markets with imperfect information. American Economic Review, 171(3), 393-410.
Tenant, D.,&Folawewo, A, (2009). Macroeconomic and market determinants of banking sector interest rate spread: Empirical Evidence from Low and Middle Income Countries. Journal of Banking, 102(2), 1-38.
Vossen, B. (2010).A research on bank liquidity management. University at Albany, STATE University of New York.
Wallison, P.J. (2008).Convergence in financial service market likely effects on insurance regulation. American Enterprise Institute, Insanitation, Washington DC, 20036.
Weaver, C. (2007). The world’s bank and the bank’s world -global governance. TheJournal of Academic Social Sciences, 13(4), 493 – 512.
Zheng, C., Rahman, M.M.,&Ashiraf, B.N., (2017). Does ownership the structure matter for banks, Capital regulation and risk-taking behavior? Empirical evidence from a developing country. Research in International Business and Finance, 42,404-21.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2023 IREM, Collins Okechukwu , EDEH, Friday Ogbu , IREM, Nnnaemeka Ekoyi
This work is licensed under a Creative Commons Attribution 4.0 International License.
