Research Article
Macroeconomic Factors Influencing Deposit Mobilization of Commercial Banks
Tatek Hailu*
Issue:
Volume 10, Issue 4, August 2024
Pages:
64-73
Received:
4 August 2024
Accepted:
3 September 2024
Published:
23 September 2024
Abstract: Deposit mobilization plays a vital role in the operations of commercial banks, facilitating financial intermediation and fostering economic development. This study delves into the impact of key macroeconomic factors on the deposit mobilization performance of commercial banks within the context of a developing economy. Through the application of panel data regression analysis, the research explores the dynamics between deposit mobilization and various macroeconomic variables, including inflation, interest rates, real GDP, exchange rates, monetary supply, and GDP per capita. The results indicate that both inflation and the monetary supply (measured by the M2/GDP ratio) exert a statistically significant negative effect on deposit mobilization. Furthermore, the investment deposit ratio also demonstrates a notable negative relationship with deposit mobilization. Conversely, GDP per capita shows a marginally significant positive correlation with deposit mobilization. The study includes a thorough descriptive analysis of the macroeconomic environment, assessing trends in inflation, exchange rates, real GDP growth, interest rates, and the expansion of money supply. This contextual review highlights a mixed macroeconomic landscape characterized by both favorable and adverse factors, which likely impact the deposit mobilization performance of commercial banks. The findings from this research offer valuable insights for policymakers and stakeholders within the banking sector. By informing the development of strategic initiatives aimed at promoting financial inclusion, enhancing asset-liability management practices, and bolstering the resilience of the banking system, stakeholders can effectively address the identified macroeconomic determinants influencing deposit mobilization.
Abstract: Deposit mobilization plays a vital role in the operations of commercial banks, facilitating financial intermediation and fostering economic development. This study delves into the impact of key macroeconomic factors on the deposit mobilization performance of commercial banks within the context of a developing economy. Through the application of pan...
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Research Article
Effect of Financial Metrics on Risk Indicators in Nigeria Listed Deposit Money Banks
Anderson Emmanuel Oriakpono*,
Sowunmi Bolanle Musiliu
Issue:
Volume 10, Issue 4, August 2024
Pages:
74-83
Received:
11 August 2024
Accepted:
28 August 2024
Published:
23 September 2024
Abstract: This study investigates the effect of financial metrics on risk indicators in Nigerian deposit money banks. The analysis employs yearly time series data spanning from 2007 to 2022, acquired from the Exchange Group PLC. Descriptive statistics, panel unit root tests, Hausman tests, and Panel Ordinary Least Squares (OLS) procedures were used at a 95% confidence interval. The study utilized secondary data sourced from the Exchange Group PLC database. The R-squared (0.564390) and Adjusted R-squared (0.540629) values indicate that the models have strong explanatory power. The results show that all variables are stationary at their levels (I(0)). The primary financial metrics influencing risk indicators among deposit money banks in Nigeria are revenue growth, net interest margin, and earnings per share. It was recommended that banks should implement effective risk management systems that can handle increased complexity and scale of operations, and regularly update them, leveraging blockchain technology for decentralized risk management as it relates to revenue growth rate of banks. Maintain a healthy net interest margin through effective risk management practices and internal controls, and utilize this strength to invest in risk mitigation measures, introducing incentive programs to encourage employee involvement in risk management. Conduct regular financial reviews and audits to ensure accurate earnings reporting and risk identification, utilizing AI-powered tools for earnings analysis to identify anomalies and potential risks. Prioritize prudent lending practices and effective risk management to maintain financial stability, implementing dynamic adjustments to the debt-to-equity ratio in response to changes in risk detection needs.
Abstract: This study investigates the effect of financial metrics on risk indicators in Nigerian deposit money banks. The analysis employs yearly time series data spanning from 2007 to 2022, acquired from the Exchange Group PLC. Descriptive statistics, panel unit root tests, Hausman tests, and Panel Ordinary Least Squares (OLS) procedures were used at a 95% ...
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