Banking structure and performance : a study of the Nigerian banking system and its contribution to Nigeria's economic development, 1960-1980

The purpose of this study is to show that within the context of \nNigeria's development effort, financial development with respect to \nthe banking system has aided investment and economic development to a \ngreater extent than is generally recognised. This study, therefore, \nsets itself the task of a detailed examination of the structure of the \nNigerian banking system as a service producing industry, the analysis \nof the economic performance of the banking system arid the prescribing \nof policies and regulations to improve the banking system's structure \nand performance. \nThe structure of the Nigerian banking system is reflected in its \nhistorical pattern of growth, ownership, the network branch expansion, \nassets and liabilities composition and the legal and regulatory \nframework. The economic performance is reflected in output, \nprofitability and the efficiency with which the banks have met some \nrequirements indeispensable for economic development such as the \ncontribution to saving-investment process and the provision of \nadequate finance to various sectors of the economy. A banking system, \nas a service industry, suffers from output measurement problem. \nSurrogates were used to measure the output of the Nigerian banking \nsystems. The profitability of the banking system was measured by the \nratios of profit after tax/capital and profit after tax/assets. \nThe determinants of the Nigerian banking system's lending and \nprofitability performance are based on the hypothesis: the demand, \npolicy and structure variables significantly affect the performance of \nthe Nigerian banking system. The evidence from the analysis indicates \nxii \nthat policy and demand factors were more important in influencing the \nperformance of the banking system. The bank market structure as \nmeasured by the bank offices rather than the deposits concentration \nratio was significant in influencing the Nigerian banking system's \nperformance. \nThe study i rounded up by prescribing policies and regulations \nto improve the structure and performance of the Nigerian banking \nsystem.