Effect of Interest Rate Determinants on the Aggregate Performance of Deposit Money Banks in Nigeria’s Banking Sector

This study explores the effect of selected interest rate determinants and their significance on the performance of Deposit money banks in Nigeria, and whether the determinants are significantly different between High performance and low performance periods, over the period of 1998 to 2015. Multivari...

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Bibliographic Details
Published in:International journal of finance & banking studies 2017-01, Vol.6 (6), p.29-41
Main Authors: Owolabi, Oluwarotimi Ayokunnu, Fayemi, Ibukun Omoshola
Format: Article
Language:English
Subjects:
Accounting
Bank earnings
Banking industry
Central banks
Commercial banks
Credit risk
Economic growth
Federal Reserve monetary policy
Foreign exchange rates
Hypotheses
Inflation
Inflation rates
Interest rates
Interest rates-deposits
International finance
Loans
Macroeconomics
Monetary policy
Profitability
Reserve requirements
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Summary:This study explores the effect of selected interest rate determinants and their significance on the performance of Deposit money banks in Nigeria, and whether the determinants are significantly different between High performance and low performance periods, over the period of 1998 to 2015. Multivariate ordinary least squares regression and paired samples t-test were employed in performing the study. The findings of Multivariate ordinary least squares regression revealed that exchange rate has a positive and statistically significant effect on deposit money bank performance, Monetary policy rate and Credit Risk have a negative and statistically significant effect on deposit money bank performance , while Inflation rate and savings deposit rate have a statistically insignificant effect on deposit money bank performance. Results of paired samples t-test revealed significant difference in means of determinants. The study recommends Naira devaluation and reduction of monetary policy rate amongst other recommendations to boost bank performance in Nigeria
ISSN:2147-4486
2147-4486
DOI:10.20525/ijfbs.v6i6.849