Banking and Finance - Scholarly Publications

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Browsing Banking and Finance - Scholarly Publications by Author "Obademi, O.E"

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    Open Access
    An analysis of the impact of external debt on banks' performance:
    (BritishJournal Publishing Incorporated, 2013) Obademi, O.E
    This study focuses on the long run relationship and causal impact between foreign or external debt and bank performance using different performance indices such as return on capital employed, earnings per share and return on equity. The micro analysis done which in this regard is on the firm specific choice of the two big banks in Nigeria i.e. First Bank Plc and United Bank for Africa during the period before the debt relief granted to Nigeria is apt against the backdrop of concentration profitability relationship. A general model of the micro analysis was developed with ample support of a macro model underpinned by a simultaneous equation using a vector auto-regression estimation. The findings are that foreign or external debt impacts negatively on bank performance but the direction of impact is different for the two banks chosen in this study. While foreign debt was most felt on return on capital employed by United Bank for Africa, the impact of foreign debt affected the earnings per share most in First Bank Plc. The difference in the direction of causal impact can be attributed to the peculiarity of the internal environment of each of the banks.
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    Open Access
    Budget Process And Procedures In Porous Developing Economies:Nigeria In Focus.
    (2009-06) Obademi, O.E; Sokefun, A. O.
    This paper focuses on the characteristic features of a typical porous developing like Nigeria in respect of inadequate institutional and legal/frameworks that can sufficiently support the preparation and implementation of a good budget .The experience in Nigeria is that budget implementation and performance often fall short of 50 percent delivery. This has made room for both official and un-official corruption .The paper looks at the economic growth pattern in Nigeria, the budget deficits over some years and the implications for poverty reduction and societal well-being. The popular Medium Term Expenditure Framework (MTEF),budgeting with special attention to activity based costing has been proposed and is being experimented. However in the light of inflation and the volatility cum instability of the sources of revenue for a country like Nigeria. the capacity of an MTEF budgeting approach to deliver the optimum expectation in terms of budget implementation and delivery may he undermined. The recommendation is that instead of the traditional minimum of a 3 year MTEF, a 2 year budget plan may perform better.
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    Open Access
    An Empirical Analysis of the Impact of Public Debt on Economic Growth:
    (2012) Obademi, O.E
    This paper focuses on the impact of public debt on economic growth using Nigeria as a case study. An analysis of the long-run relationship and impact of debt from the perspective of the value impact and proportional impact was done. The value impact variables used herein include the external debt value, domestic debt value, total debt value and budget deficit figures. The proportional impact variables are ratios of the value impact to the gross domestic product (GDP). An augmented Cobb Douglas model was used and subsequently a dynamic version of the functional relationship was estimated using Co- integration technique to capture the long-run impact of debt variables on economic growth. The result showed that the joint impact of debt on economic growth is negative and quite significant in the long-run though in the short-run the impact of borrowed funds and coefficient of budget deficit is positive. In the study, the speed at which the short-run equation converges to equilibrium in the long-run as shown by the Error Correction Mechanism coefficient was found to be slow. The conclusion from this study is that though in the short-run the impact of borrowed fund on the Nigerian economy was positive, the impact of debt in the long-run depressed economic growth as a result of incompetent debt management. Key words: Public debt; Economic growth
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    Open Access
    How Domestic Debt Hurts Bank Performance:
    (2012-12) Obademi, O.E
    This study focuses on the interplay of domestic debt and bank performance and thus an attempt has been made to investigate the long-run relationship and direction of causality of the impact of domestic debt on bank performance using different variables herein the earnings per share, return on equity and return on capital employed. The banks used are the First Bank of Nigeria Plc, United Bank for Africa Plc being the two banks with huge penetration in the Nigerian banking industry. A general model for the micro analysis was developed with ample support of a macro model with the background of a simultaneous equation and further use of vector auto-regression estimation procedure. The result of the analysis shows that domestic debt impairs bank performance but the direction of impact on the two banks varies. While domestic debt impacts most negatively on the return on equity of First Bank Plc followed by its earnings per share, for United Bank for Africa domestic debt impacts most negatively on return on capital employed followed by its return on equity. It is believed that though domestic debt can be used as an instrument of economic stabilization, nonetheless, care must be taken to avoid a situation whereby it makes the business environment unfriendly.
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    Open Access
    A Macro Analysis of Bank Performance in Debt-Burdened Countries: The Case of Nigeria
    (2013) Obademi, O.E
    'in this study the focus is on the long-run relationship and impact of public debt on banking industry performance i.e. a macro-analysis in Nigeria using different performance indices such as total bank lending, total bank deposit and total bank branches between the period I975-2005. A general macro model underpinned by a simultaneous equation using a vector auto-regression estimation approach was done: with the objective of sensitising countries on the need for caution on public debt. The findings arc that public debt impacts negatively on bank performance but the extent of Impact IS different on die variables chosen in this study. The analysis carried out show that domestic debt Impacts most negatively on total bank lending while external debt:impacts most negatively on total bank deposit. It IS believed that though domestic debt can be used as an instrument of economic stabilization. nonetheless. in the choice of whether to U!)C demesne debt or external debt it may be: more expedient to use external debt based on the outcome of this study though it should be slated that in doing that still, adequate care must be taken to maintain an acceptable Debt GDP ratio needed for debt sustainability.
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    Open Access
    Managing Nigeria's Foreign Reserve for Enhanced Macroeconomic Performance.
    (2007) Obademi, O.E
    This paper focuses on foreign reserve management and its impacts on the macroeconomic performance of the Nigerian economy and by extension the well being of Nigerians. The role of the Central Bank of Nigeria as the principal player or state organ in the use of monetary policy to achieve government's intentions of enhanced human welfare was looked into. Consequently macroeconomic variables like the inflation rate, intermediation spread, foreign exchange rate among others were discussed with the suggestion that it is expedient for the government to use part of the foreign reserve to fund fiscal deficits and undertake strict inflation targeting or flexible inflation targeting by relying on the use of foreign reserve to control exchange rate.