This study examined the relationship between non-performing loans and the profitability of
banks, with focus on certain deposit money banks (DMBs) in Nigeria. The study adopted a descriptive
research design. Data relating to the periods 2008-2017 were collated from the Financial Statements
of the relevant banks. The Pearson Product Moment Correlation, as computed via the SPSS, was used
to test the four hypotheses holding the study. Non-performing loans, as measured by the natural
logarithms of Inflation Rate (INF.RATE) and Bank Credit Policy (BCP) represented the independent
variable, while Return on Assets (ROA) and Return on Equity (ROE) represented the dependent
variable (Profitability). The study involved a total population of 28 DMBs, from which 10 was drawn
into the sample. Further analyses covered measures of central tendencies (mean, median and mode),
measures of dispersion (Standard Deviation, Variance, Minimum and Maximum values), ANOVA
(Analysis of Variance) and multiple regression models. The results derived showed that whereas BCP
has a statistically positive relationship with measures of the dependent, INF.RATE has a statistically
negative relationship with the measures of the dependent variable, all at the 95% level of confidence. It
is recommended thus, amongst others, that banks regulate lending in accordance with the rise or fall in
inflation rate; and if ever loans must be granted, it should be so done with interest elements that favour
easy repayment as reflected in the respective banks’ credit policies.
Ozogbuda, S. (2019). Deposit-Bank. Afribary. Retrieved from https://tracking.afribary.com/works/deposit-bank
Ozogbuda, Samuel "Deposit-Bank" Afribary. Afribary, 25 Feb. 2019, https://tracking.afribary.com/works/deposit-bank. Accessed 26 Nov. 2024.
Ozogbuda, Samuel . "Deposit-Bank". Afribary, Afribary, 25 Feb. 2019. Web. 26 Nov. 2024. < https://tracking.afribary.com/works/deposit-bank >.
Ozogbuda, Samuel . "Deposit-Bank" Afribary (2019). Accessed November 26, 2024. https://tracking.afribary.com/works/deposit-bank