Effect of Bank Size and Operational Efficiency on Profitability of Deposit Money Banks in Nigeria, 2008-2016
Date
Journal Title
Journal ISSN
Volume Title
Publisher
Abstract
This paper examines the effect of bank-size and operational efficiency on the profitability of Deposit Money Banks (DMBs) in Nigeria using secondary data extracted from the listed banks' financial statements for the years 2008-2016. The independent variables were proxied by Bank Size and Operational Efficiency while profitability was represented by Return on Assets (ROA). The study employed correlational research design to examine the effect of bank size and operational efficiency on profitability of the Deposit Money Banks in Nigeria. The Techniques of data analysis employed for the study was the multiple regression technique which was used for data interpretation.lt was established that in spite of the substantial contribution of the banking industry to Nigeria's economy, their profitability is arguably constrained by high operating costs largely occasioned by the establishment and maintenance of more than necessary bank branches especially in remote areas of the country. This study therefore found that bank size is negatively and insignificantly related to profitability of DM Bs in Nigeria while operational efficiency has a positive and significant relationship with bank profitability. The study recommends that bank managers should better employ mobile technology, which reduces operating costs and enhances bank profitability rather than mere expansion of bank branches.