ASSESSMENT OF MACROECONOMICS DETERMINANTS OF LOAN LOSS PROVISIONING BY MONEY DEPOSIT BANKS IN NIGERIA

This study empirically assesses the macroeconomics determinants cf loan loss provisioning by deposit money banks in Nigeria The objective cf the study is to imestigtte the rdatwnshipcf GDP growth rate and loan growth mth loan loss pivusions as wdl as assess whether or not bank managers lend prudently in Nigpia The studyused banking and economic data fora panel cf deien banks quoted on the Nigprian Stock Exchange cner the period 2002-2011. Using dynamic panel data econometric technique, the study find eudence that shorn positive relationship between GDP growth rate and loan loss profusions. The study also find eudence cf pro-cydical behaviour cf banks in loan loss prousioning as loan growth is negttbtdy associated mth loan loss profusions. This study therefore recommends the need for bank regidatcns to monitor rapid loan growth by the deposit money banks in Nigeria to ensure that they are growth-supportize and the credit quality arising from such credit growth does not distort profitability and solvency cf banks. This is in line mth the fact that the success cf the financial intermediation cf barks lies in its ability to foster efficient capital allocation and financial deidopmert.