EFFECTS OF INTEREST RATE ON PROFITABILITY OF LISTED DEPOSITE MONEY BANKS IN NIGERIA
Fluctuations in interest rates remain a critical challenge affecting the profitability of listed deposit money banks in Nigeria. This study investigates the relationship between interest rates and banks profitability, focusing on Return on Assets (ROA), Return on Equity (ROE), and Net Interest Marg...
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| Format: | Article |
| Language: | English |
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Department of Accounting and Finance, Federal University Gusau
2025-07-01
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| Series: | Gusau Journal of Accounting and Finance |
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| Online Access: | https://www.journals.gujaf.com.ng/index.php/gujaf/article/view/388 |
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| _version_ | 1839604054049685504 |
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| author | Joseph Olorunfemi Akande |
| author_facet | Joseph Olorunfemi Akande |
| author_sort | Joseph Olorunfemi Akande |
| collection | DOAJ |
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Fluctuations in interest rates remain a critical challenge affecting the profitability of listed deposit money banks in Nigeria. This study investigates the relationship between interest rates and banks profitability, focusing on Return on Assets (ROA), Return on Equity (ROE), and Net Interest Margin (NIM) among 10 listed deposit money banks from 2013 to 2022. Employing a panel regression approach, the study analyses secondary data from annual financial reports and regulatory sources to assess how interest rate movements influence banking performance. Preliminary findings indicate that interest rate fluctuations impact profitability, but the extent and direction of these effects vary across different financial indicators. While some banks benefit from higher interest rates through improved margins, others experience increased funding costs, reduced loan disbursement, and higher default risks. The study acknowledges that the final results are yet to be fully established, emphasizing the need for a nuanced approach to interest rate management. Given the evolving financial landscape, the study highlights the importance of risk-adjusted pricing models and hedging strategies to mitigate adverse effects. Additionally, regulatory policies that stabilize interest rates could help banks maintain profitability and sustain economic growth. The study's insights contribute to ongoing discussions on optimizing financial performance in Nigeria’s banking sector.
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| format | Article |
| id | doaj-art-2c2096cb6d614cd1a394c10f9d0aae09 |
| institution | Matheson Library |
| issn | 2756-665X 2756-6897 |
| language | English |
| publishDate | 2025-07-01 |
| publisher | Department of Accounting and Finance, Federal University Gusau |
| record_format | Article |
| series | Gusau Journal of Accounting and Finance |
| spelling | doaj-art-2c2096cb6d614cd1a394c10f9d0aae092025-08-02T04:46:14ZengDepartment of Accounting and Finance, Federal University GusauGusau Journal of Accounting and Finance2756-665X2756-68972025-07-0161EFFECTS OF INTEREST RATE ON PROFITABILITY OF LISTED DEPOSITE MONEY BANKS IN NIGERIAJoseph Olorunfemi Akande0Department of Accounting Science, Walter Sisulu University, Mthatha, South Africa Fluctuations in interest rates remain a critical challenge affecting the profitability of listed deposit money banks in Nigeria. This study investigates the relationship between interest rates and banks profitability, focusing on Return on Assets (ROA), Return on Equity (ROE), and Net Interest Margin (NIM) among 10 listed deposit money banks from 2013 to 2022. Employing a panel regression approach, the study analyses secondary data from annual financial reports and regulatory sources to assess how interest rate movements influence banking performance. Preliminary findings indicate that interest rate fluctuations impact profitability, but the extent and direction of these effects vary across different financial indicators. While some banks benefit from higher interest rates through improved margins, others experience increased funding costs, reduced loan disbursement, and higher default risks. The study acknowledges that the final results are yet to be fully established, emphasizing the need for a nuanced approach to interest rate management. Given the evolving financial landscape, the study highlights the importance of risk-adjusted pricing models and hedging strategies to mitigate adverse effects. Additionally, regulatory policies that stabilize interest rates could help banks maintain profitability and sustain economic growth. The study's insights contribute to ongoing discussions on optimizing financial performance in Nigeria’s banking sector. https://www.journals.gujaf.com.ng/index.php/gujaf/article/view/388Interest rateprofitabilitylisted deposit money banks in Nigeria |
| spellingShingle | Joseph Olorunfemi Akande EFFECTS OF INTEREST RATE ON PROFITABILITY OF LISTED DEPOSITE MONEY BANKS IN NIGERIA Gusau Journal of Accounting and Finance Interest rate profitability listed deposit money banks in Nigeria |
| title | EFFECTS OF INTEREST RATE ON PROFITABILITY OF LISTED DEPOSITE MONEY BANKS IN NIGERIA |
| title_full | EFFECTS OF INTEREST RATE ON PROFITABILITY OF LISTED DEPOSITE MONEY BANKS IN NIGERIA |
| title_fullStr | EFFECTS OF INTEREST RATE ON PROFITABILITY OF LISTED DEPOSITE MONEY BANKS IN NIGERIA |
| title_full_unstemmed | EFFECTS OF INTEREST RATE ON PROFITABILITY OF LISTED DEPOSITE MONEY BANKS IN NIGERIA |
| title_short | EFFECTS OF INTEREST RATE ON PROFITABILITY OF LISTED DEPOSITE MONEY BANKS IN NIGERIA |
| title_sort | effects of interest rate on profitability of listed deposite money banks in nigeria |
| topic | Interest rate profitability listed deposit money banks in Nigeria |
| url | https://www.journals.gujaf.com.ng/index.php/gujaf/article/view/388 |
| work_keys_str_mv | AT josepholorunfemiakande effectsofinterestrateonprofitabilityoflisteddepositemoneybanksinnigeria |