Effect of Non-interest Income on Profitability of Deposit Money Banks in Nigeria


Olowolaju, Philip Segun

Abstract


The study examined the effect of non-interest income on the profitability of Deposit Money Banks (DMBs) in Nigeria between 2006 and 2015. Five out of the 21 DMBs in Nigeria were purposively selected based on the numerical strength of their customers, volume of transactions and geographical spread. Multiple regressions were used in analyzing the data. The result of the correlation shows that non-interest income and profit of Nigerian banks   was found to be positive and significant at 0.05 level of significance with adjusted R = 0.583. However the growth rate of non-interest income has been inconsistent over the years. Liquidity ratio, prime lending rate and inflation are found to have no significant relationship with non-interest income. The study concluded that non-interest income has positive and significant effect on the profitability of DMBs in Nigeria. It is recommended that deposit money banks should be actively involved in customer analysis and market research in order to develop those products and services that will continually satisfy majority of their customers and also deploy effective and efficient technology that will ease banking transactions which the consumers will be willing to pay for so that high non- interest income can be generated.

Keywords


Non-interest income, Profitability, Deposit, Banks, Liquidity, Customers.

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About this article

Title

Effect of Non-interest Income on Profitability of Deposit Money Banks in Nigeria

Keywords

Non-interest income, Profitability, Deposit, Banks, Liquidity, Customers.

DOI

10.20448/journal.525.2018.21.1.8

Date

2018-12-17

Additional Links

Manuscript Submission

Journal

Journal of Banking and Financial Dynamics
Vol 2, No 1 (2018) Page: 1-8

Online ISSN

2576-6821

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Citations

Authors & Affiliations

Olowolaju, Philip Segun
Department of Accounting, Federal University of Technology, Akure
Nigeria


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Journal of Banking and Financial Dynamics

 ISSN: 2576-6821


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