Effect of Corporate Governance on Asset Quality: Performance Evaluation of the Nigerian Banking Sector in the Post Consolidation Era
International Journal of Accounting, Finance and Risk Management
Volume 2, Issue 1, February 2017, Pages: 1-9
Received: Jul. 31, 2016;
Accepted: Nov. 9, 2016;
Published: Dec. 27, 2016
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Sani U. Gorowa, Department of Banking and Finance, Faculty of Management Science, Federal University of Abuja, Abuja, Nigeria
Ali Jude Igyo, Department of Banking and Finance, Faculty of Management Science, Federal University of Agriculture, Makurdi, Nigeria
The study examined the effect of corporate governance on the performance of asset quality of Deposit Money Banks (DMBs) in the post 2004 banking sector reforms. The population of study consists of the twenty four (24) deposit money banks. Time series data for the post-reform period (2006-2014) were generated from the Central Bank of Nigeria (CBN) Statistical Bulletin and annual financial reports of the various banks in Nigeria and was analyzed with descriptive and inferential statistical tools. Multiple Regression analysis was used to test the hypothesis with the aid of Eview. Jacbera test was used to test for data stationarity, while Variance Inflation Factor (VIF) and Heterosckedasticity white Test were used for data diagnosis. The findings of the study revealed that the 2004 reforms caused an improvement on Bank Asset Quality (BAQ). However the improvement is not significant at 5% level. The study consequently concludes that despite the reforms, Deposit Money Banks were still faced with post reform challenges of non-performance. The research therefore recommended that more efforts should be made to ensure adequate compliance with corporate governance provisions in improving performance. Frantic efforts should be made to improve on the huge non-performing loans and management of assets quality, which to a large extent, contribute to bank failures.
Sani U. Gorowa,
Ali Jude Igyo,
Effect of Corporate Governance on Asset Quality: Performance Evaluation of the Nigerian Banking Sector in the Post Consolidation Era, International Journal of Accounting, Finance and Risk Management.
Vol. 2, No. 1,
2017, pp. 1-9.
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