Board Characteristics and Loan Portfolio of Deposit Money Banks in Nigeria.
ABSTRACT
Banks play an important role in the development and growth of a nation’s economy. The sector carries out the core role of financial intermediation between the surplus-spending and deficit-spending of economic units.
This study examines the relationship between the characteristics of a bank’s board of directors and the banks’ loan portfolio of Deposit Money Banks in Nigeria.
The board of directors has the responsibility to monitor the loan policy of the bank; therefore, the structure of the board seems likely to influence the portfolio of loans that the bank has outstanding.
The study covers the period of six years (2005-2010), with the population of twenty-one (21) a sample of nine banks.
Multiple regression is employed as a tool of analysis on the data which are extracted from the annual reports of the sampled banks.
The result reveals that, board characteristics of deposit money banks in Nigeria have a strong influence on their loan portfolios during the period of study.
TABLE OF CONTENTS
Title Page i
Declaration ii
Certification iii
Dedication i
Acknowledgements v
Abstract vii
Table of Contents viii
CHAPTER ONE: INTRODUCTION
- Background to the Study 1
- Statement of the Problem 4
- Objectives of the Study 6
- Hypotheses of the Study 6
- Scope of the Study 7
- Significance of the Study 7
- Organisation of the Study 8
CHAPTER TWO: LITERATURE REVIEW
- Introduction 10
- The Concept of Corporate Governance 10
- Corporate Governance Models 17
- Bank Corporate Governance Paradigm 19
- Board Characteristics and Loan portfolio of Banks 25
- Theoretical Framework 32
- Summary 38
CHAPTER THREE: RESEARCH METHODOLOGY
- Introduction 40
- Research Design 40
- Population of the Study 40
- Sample Size and Sampling Technique 41
- Method of Data Collection 42
- Techniques of Data Analysis 44
- Summary 45
CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS
- Introduction 46
- Presentation and Analysis of Results 46
- Descriptive Statistics 46
- Correlation Matrix 48
- Regression Results 49
- Discussion of Findings 52
- Implications of Findings 54
- Summary 56
CHAPTER FIVE: SUMMARY, CONCLUSIONS AND RECOMMENDATIONS
- Summary 58
- Conclusions 61
- Recommendations 63
- Limitations of the Study 64
- Areas of Further Research 64
Bibliography
INTRODUCTION
1.1 Background of the Study
Financial intermediation plays an important role in any economy as it serves its purpose to transform assets, process information, and monitor borrowers.
In a perfect world without any sort of frictions, the financial sector should have no distortionary effect on the real economy.
However, in a world with informational problems, it is not surprising that shocks to the economy could be propagated and magnified through the financial system and which could affect the real economy (Sumner, 2002).
The issue of corporate governance is now a common one and has featured regularly in discourses both in the print and electronic media.
Considerable academic attentions have also been rightly focused on various aspects of the issue including for instance, executive compensation (Harvey and Shrieves, 2001), regulation (Keenan, 2004), corporate control (La Porta, Lopez-de-Silanes, Shleifer, Vishny, 2000) Institutional ownership (Mitra, Hossain, and Deis, 2007), among others.
Numerous corporate scandals of the late 20th and early 21st centuries such as BCCI, Polypeck, ENRON, Lehman Brothers to mention but a few have played significant part in the spotlight enjoyed by the topic and it seems that there are many more questions emerging than answers for the known lapses in the control systems that may have facilitated these corporate misbehaviours.
Bibliography
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Asika, N. (2006) (1991): Research methodology in the Behavioral sciences. Longman Nigeria Plc.
Baliga, B. R., Moyer, N. C., and Rao, R. S. (1996): CEO duality and firm performance: what is the fuss? Strategic Management Journal, 17:41-53.
Barako, D.G.; Hancock, P. and Izan, H. (2006) Factors influencing voluntary corporate disclosure by Kenyan companies, Corporate Governance, 14 (2),107-125
Basel Committee on Banking Supervision (BCBS) (1999) “Enhancing Corporate Governance forBanking Organisations”, Bank for International Settlements, Switzerland.
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