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DETERMINANTS OF CAPITAL MANAGEMENT THROUGH LOAN LOSS PROVISIONS BY BANKS IN NIGERIA: AN EMPIRICAL ANALYSIS
(Department of Accounting, Nasarawa State University Keffi, 2014-04-06) Abdulkarim, Shaibu Alhassan
his study empirically analyses the determinants cfcapital management througfi loan less profusions in Nigeria. The objective cf the study is to imestigtte the association cf capital and earring with loan loss profusions and assess wJrether or not bank manages lendpmdently in Nigeria. We use banking and economic data for a panel cf eleien banks quoted on the Nigerian Stak Exchange oner the period 2002-2011. Using dynamic panel data econometric technique, we find evidence that indicate that loan loss prenisions have a pro-cydical effect, as tloey are negatively related to capital Howezer, this procydical behaviour cf loan loss prenisions is partially mitigated by income smoothing practice This study therefore supports the introduction cf dynamic loan loss prenisions model in Nigeria in which expected losses are covered by loan loss prenisions while unexpected losses are covered by capital