期刊名称：Arabian Journal of Business and Management Review
电子版ISSN：2223-5833
出版年度：2014
卷号：3
期号：11
出版社：Sohar University, Oman and American University of Kuwait
摘要：This study examined how interest rates affect the profitability of deposit money banks in Nigeria. The study was based on country aggregate level annual data that covered a per iod of thirteen years 1999 to 2012 and made use of multivariate regression analysis under an econometric framework. The Augmented Dickey and Fuller unit root test results indicate that the series are either I(0), I(1) or I(2) stationary. The estimated resu lts show that Maximum lending rate, Real Interest rate and Savings deposit rate have negative and significant effects on the profitability of Nigerian deposit money banks as measured by return on assets at the 5% level of significance. Also, the study foun d t hat Real interest rate at the 8% level of significance has negative and significant relationship with Return on Equity of money deposit banks in Nigeria. On the other hand, the study found no significant relationship between interest rate variables and Net Interest Margin of Deposit Money Banks in Nigeria. The implication of the findings of this study suggests that the profitability of the banking sector is a function of changing interest rates. The study therefore recommends that government should adopt monetary policies that will help Nigerian deposit money banks to improve on their profitability and there is need to review and strengthen bank lending rate policies through effective and efficient regulation and supervisory framework. Banks can improve t heir profitability through charging moderate lending rates as against maximum rates as their circumstances may allow. Furthermore, the managers of money deposit banks are expected to create the conditions for an efficient banking system devoid of informati on asymmetry to adapt to changing macroeconomic variables of interest rates and inflation. Banks' management must efficiently manage their portfolios in order to protect the long run interest of profit - making.
