This contains research articles published by lecturers in the department of Accounting

Permanent URI for this collectionhttps://repository.nileuniversity.edu.ng/handle/123456789/103

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Subject: search.filters.subject.Deposit Money Banks

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    Bank Funding Strategy and Income Smoothing Practices in Nigeria
    (Global Journal of Accounting, 2022-02-02) Abdulai Agbaje Salami; Uthman Ahmad Bukola; Rahji Ohize Ibrahim; Kamaldeen Ibraheem Nageri
    The regulators’ provision of bailouts to troubled banks accentuates the connection between level of funding and bank financial condition. This scenario has been characteristic of Nigerian deposit money banks (DMBs) in the last decade and followed by a number of reforms including adoption of International Financial Reporting Standards (IFRSs). This prompted the study’s examination of nexus between bank funding strategy and income smoothing practices achievable via adjustments to loan loss provisions (LLPs) considering IFRSs adoption and solvency risk. Bank-level unbalanced panel data were hand-extracted from the annual reports of a sample of 16 DMBs for the period 2007-2017. Data were analyzed using appropriate panel regression model subsequent to derivation of discretionary provision for loan losses (DPL) used to measure income smoothing and index of funding strategy (FSI) as a measure of overall funding strategy. The results showed that bank funding drive prompts Nigerian DMBs’ income smoothing practices via DPL regardless of their solvency status and reflects majorly in their motive for external financing, deposit and non-deposit funding other than internal funding strategy. However, reduction was noticeable during IFRS given the observed inverse relationship between funding strategy and Nigerian DMBs’ income smoothing practices. Despite improved financial reporting quality during IFRS, the mixed results obtained in the funding strategy-DPL nexus of Nigerian DMBs threatened by risk of insolvency call for increased level of oversights and additional reforms by the regulators. The need for regulators to re-sharpen their supervisory tools as Nigerian DMBs switch from IAS 39 to more discretions-inclined IFRS 9 for loan loss reporting was also advocated. This study is unique for derivation of FSI and joint test of IFRS-solvency risk moderating influence.
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    Bank Loan Loss Cyclicality in Nigeria
    (Renaissance University Journal of Management and Social Sciences, 2022-02-02) Abdulai Agbaje Salami; Uthman Ahmad Bukola; Kayode Mohammed Ajape
    The occurrence of global and local meltdowns and the subsequent instability experienced by the Nigerian banking sector necessitate empirical test of the nexus between business cycle and loan loss provisions (LLPs). This study examined the loan loss cyclicality behavior of Nigerian deposit money banks (DMBs) taking into consideration economic-boom-bust-cycles. Bank-level and macroeconomic data were obtained from sampled 16 DMBs’ annual reports and CBN Statistical Bulletin respectively between 2007 and 2017 covering both periods of global financial meltdown (2008-2009) and local economic recession (2016-2017). The study’s hypotheses were tested using Prais Winsten regression with correlated Panel Corrected Standard Errors (PW-PCSE). The results generally showed that provisioning behavior by Nigerian DMBs is pro-cyclical. This was based on significantly negative coefficients of loans growth (ΔLOAN) and real GDP growth rate (GDPGR) representing bank-specific and macroeconomic loan loss pro-cyclicality respectively. In contrast, loan loss counter-cyclicality was found during global financial crisis against majority evidence in the literature. Meanwhile, loan loss pro-cyclicality was peculiar to Nigerian DMBs during local economic recession. While the loan loss pro-cyclical behaviour of Nigerian DMBs represents imprudent provisioning policies and might have been incidental to the collapse of some Nigerian banks in the past, the counter-cyclicality during global meltdown is traceable to the fact that the crisis had no substantial negative influence on Nigeria’s financial system. To address the problem of pro-cyclicality, it was recommended that bank regulators ensure that macroeconomic prediction models adopted by Nigerian DMBs be made relative perfect. There is also need for strengthening bank capital buffers in record time and conduct of stress tests for individual DMBs rather extant consolidated approach among others.