Asset Allocation as Determinant of Bank Profitability in Nigeria
Journal: International Journal of Trend in Scientific Research and Development (Vol.1, No. 5)Publication Date: 2018-07-30
Authors : Gloria Obiageli Izundu Clem Nwakoby Cyprian Okey Okoro Udoka Bernard Alajekwu;
Page : 219-228
Keywords : Asset allocation; firm profitability; Deposit Money Banks; Nigeria;
Abstract
In the business of banking, banks do not only invest the received deposits to meet future obligations but also to make a profit. The study investigates the effect of asset allocation on profitability Deposit Money Banks in Nigeria. The study adopted a panel regression model involving five selected commercial banks. The data were obtained from the financial statement and annual reports of the selected banks spanning 2011 to 2015. The explanatory variables of the study are liquid assets, equities, loans, securities. The panel Ordinary Least Square regression was employed for data analyses. The findings have shown that aggregate asset allocation variable significantly explains 54% of changes in bank profits. Further results shows that liquid assets, investments equities have positive but insignificant effect on profitability of Deposit Money Banks in Nigeria; loan extension of the banks have insignificant negative effect on profitability of Deposit Money Banks in Nigeria; whereas investments in security have significant positive effect on the profitability of Deposit Money Banks in Nigeria. The study thus concluded that asset allocation is an important financial management tool to enhancing bank profitability, and that investments in securities are veritable channel for banks to improve profitability in Nigeria. Gloria Obiageli Izundu | Clem Nwakoby | Cyprian Okey Okoro | Udoka Bernard Alajekwu*"Asset Allocation as Determinant of Bank Profitability in Nigeria" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-1 | Issue-5 , August 2017, URL: http://www.ijtsrd.com/papers/ijtsrd2278.pdf http://www.ijtsrd.com/economics/finance/2278/asset-allocation-as-determinant-of-bank-profitability-in-nigeria/gloria-obiageli-izundu
Other Latest Articles
- Interfacing of Grid Connected Wind Energy Conversion System Based on PMSG through NPC Inverter
- To Compare The Effect Of Proprioceptive Neuromuscular Facilitation and Static Stretching on Flexibility of Hamstring Muscle: A Comparative Study
- To Compare the Efficacy of Deep Transverse Friction Massage and Ultrasound in Patients with Upper Trapezius Trigger Points
- The Empirical Study of the Evolution of the Next Generation Firewalls
- Situational Analysis of Diet and Nutritional Profile of 21 to 70 Years Urban Population with Respect to BMD Impact
Last modified: 2018-07-30 19:44:39