Impact of Regulation on Profit Performance of Commercial Banks in Nigeria

Abstract

This study examined the impact of regulation on profit performance of commercial banks in Nigerian from 1990-2018 Bank capitalization, and monetary policy rates were adopted as independent variables and banks regulation proxies. The dependent variable for commercial bank performance indicator is return on assets. The study adopted ex-post facto research design and used ARDL technique in the analysis, aided by E-views statistical package. Results revealed that (i) Bank capitalization had a negative and significant impact on return on assets of the Nigerian commercial banks and (ii) Banks monetary policy rate had a, positive and significant impact on ROA, of the Nigerian commercial banks. The study recommend as follows:(i) Monetary authorities should regularly overhaul banks regulatory framework at most biannual to reflect plausible assets/liability management guideline and guarantee workable net monetary assets, (ii) Regulatory authorities should always maintain efficient and consistent monetary policy framework especially capitalization, weighted average deposit and lending rate and reserves to guarantee effective financial intermediation of the commercial banks,