Corporate governance and bank performance in Nigeria
Thesis (MBA)--University of Stellenbosch, 2010.
The purpose of this study was to determine the relationship between corporate governance and the profitability of banks in Nigeria. This has been done in line with previous studies in other parts of the world where it was discovered that the corporate governance culture of a firm does have an effect on its profitability. The corporate governance variable employed in this study was that of ownership. Four types of ownership were used as the independent variables, namely board ownership, institutional ownership, foreign ownership and government ownership. Whilst the dependent variables employed were return on assets (ROA) and non performing loans ratio (NPL). Information on banks’ return on assets and non performing loans was generated from year end financial statements and yearly bank reviews from a Nigerian based research firm called Agusto and Company. Also the banks’ ownership variables information was also pooled from financial reports, the Agusto report on banking industry as well as bank websites. A descriptive statistic data was generated to review the trend of banks’ return on assets and non-performing loan performance indicators, whilst a Pearson correlation table was generated to review the correlation between the ownership variable and the performance of banks. The results generated were found to be similar to what has previously been done. This study makes a significant contribution to research by exposing the importance of corporate governance, a concept which has been neglected in the Nigerian corporate world. Finally it provides further justification to do further research in this area in the Nigerian banking and corporate environment.