Banking and Finance - Scholarly Publications

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Browsing Banking and Finance - Scholarly Publications by Subject "Bank Performance"

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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
    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.