CBN CODE OF CORPORATE GOVERNANCE AND FINANCIAL PERFORMANCE OF LISTED BANKS IN NIGERIA

This research examines the CBN code of corporate governance on financial performance of Listed Banks in Nigeria. The study employed the non-surveyed research design, to quantify the level of compliance with code, compliance index, correlation matrix and simple regression method of data analysis was used to access the effect of compliance with CBN code on financial performance of banks in Nigeria. It was discovered that Compliance with the CCG by Nigeria banks has greatly improved the quality of financial performance of banks. This is because the information which disclosure uses to be voluntarily is now made to be mandatory with the introduction of CCG. It was also found out that corporate governance has significant positive importance on the financial performance of banks in Nigeria. It was therefore recommended that The CCG should be reviewed from time to time by the Central Bank of Nigeria (CBN) and the Nigerian Deposit Insurance Corporation (NDIC) taking into cognizance the information requirement of the users and ensures its availability at all time in the annual report of the banks.

 

TABLE OF CONTENTS

DECLARATION  ……………………ii

CERTIFICATION/APPROVAL…………………….. …………….iii

DEDICATION  ……………………...iv

ACKNOWLEDGEMENT ………………….……………………….v

ABSTRACT  ………………………..vii

TABLE OF CONTENTS  …………..viii

LIST OF TABLE  ……………………ix

CHAPTER ONE…………….…………………………. ………….....1

INTRODUCTION …. …………….......1

1.1 Background to the Study……………. ……………...………..1

1.2 Statement of the Research Problem……………….………2

1.3 Objectives of the Study  ………4

1.4 Research Hypothesis  …………4

1.5 Significance of the Study  …….5

1.6 Scope of the Study  ……………5

1.7 Limitation of the Study  ……….6

CHAPTER TWO  ……………………..8

LITERATURE REVIEW  …………….8

2.1 Introduction  …………………..8

2.2 Concepts of Corporate Governance ………………………….8

2.2.1 The Historical Development of CG in Nigeria …………..…11

2.2.2 Measures to Ensure/Improve in Good CG Practices …….….12

2.3  Corporate Governance Principles and Compliance …………14

2.3.1  Non Compliance with CBN Code by Banks ………………..15

2.4  Concept of Banks Performance ……………………………..17

2.5  Relationship between Compliance with CBN Code and Financial Performance of Banks 19

2.6  Corporate Governance in Nigerian Banks …………………..20

2.7  Review of Empirical Literatures ……………………………25

2.8  Theoretical Framework  ……..26

CHAPTER THREE  …………………28

RESEARCH METHODOLOGY  …...28

3.1 Introduction…..………………. …………………………….28

3.2  Research Design………………………. ……………………28

3.3  Population of the Study  ……..28

3.4  Sample Size....30

3.4:1  Sampling Techniques  ……….30

3.5  Method of Data Collection  ….31

3.6  Variables of the Study   ………31

3.6:1  Independents Variables  ……..31

3.6.2  Dependent Variables………..  31

3.7  Method of Data Analysis  ...…32

3.7:1  Compliance Indexes  ………..33

3.7:2  Simple Regression Analyses  ..33

3.7.3  Correlation Coefficient . ……34

3.8  Data Summary/Tabulation……………………………. …...34

CHAPTER FOUR  …………………35

DATA PRESENTATION, ANALYSIS AND INTERPRETATION……………………………..35

4.1  Introduction  .……………….35

4.2  Presentation and Discussion of Results ….…………………35

4.2.1  Compliance Index  …………..35

4.3  Regression Results of the Industry …………………………40

4.3.1  Coefficient of Determination (R2) ………………………….41

4.3.1  Regression Result of the Industry …………………………..41

4.3.2  Coefficient of Determination (R2) …………………………..42

4.3.2  Regression Result of the Industry …………………………..42

4.3.3  Coefficient of Determination (R2) …………………………..43

4.4  Testing the Significance of the Independent Variable in the Model………………………..43

4.4.1  Banks in Nigeria do not comply with the CBN code of Corporate Governance 2006……..44

4.4.2  There is no Significant Relationship between Compliance and Financial Performance of              Listed Books in Nigeria...  …..46

4.4.3  Compliance with CBN Code of Corporate Governance do not have Impact on Financial Performance of Banks in Nigeria …………………………46

4.5  Summary of the Chapter  ….47

CHAPTER FIVE  …………………..48

SUMMARY, CONCLUSION AND RECOMMENDATION …….48

5.1  Introduction  ………………...48

5.2  Summary  ……………………48

5.3  Conclusion  ………………….49

5.4  Recommendations  …………..50

BIBLIOGRAPHY  …………………..52

LIST OF TABLES

Table 3.1 Population of the Study....……...29

Table 3.2 Sampled Banks  …………....30

Table 4.1 compliance with the CBN code ……………………...……37

Table 4.2 Compliance Index Mean...........…...39

Table 4.3 compliance with CBN code on ROE ……………………..40

Table 4.4 compliance with CBN code and ROCE …………………..42

Table 4.5 Compliance with CBN codes and ROA …………………..43

Table 4.6: Correlations matrix  …...….47