The effect of bank distress and economic growth of nigeria
Table Of Contents
Title
page – – – – – – – – – – i
Declaration – – – – – – – – – – ii
Certification – – – – – – – – – – iii
Dedication – – – – – – – – – – iv
Acknowledgements – – – – – – – – – v
Table
of contents – – – – – – – – – vi
List
of Tables – – – – – – – – – – ix
Abstract – – – – – – – – – – x
Chapter ONE
: INTRODUCTION
1.1
Background of the Study – – – – – – – 1
1.2
Statement of the Problem – – – – – – – 2
1.3 Objectives
of the Study – – – – – – – 4
1.4 Research
Questions – – – – – – – – 5
1.5 Research
Hypotheses – – – – – – – – 5
1.6 Significance
of the Study – – – – – – – 5
1.7 Scope
and Limitations of the Study – – – – – – 6
1.8 Organization
of the Study – – – – – – – 7
1.9 Definition
of Terms as Used in the Study – – – – – 7
CHAPTER
TWO: LITERATURE REVIEW
2.1 Conceptual Review – – – – – – – – 8
2.1.1 History
and Evolution of Banking in Nigeria – – – – – 8
2.1.2 The
Role of the Banking Sector in Economic Growth of Nigeria – – 10
2.1.3 The Concept of Bank Distress in Nigeria – – – – – 13
2.1.4 Definition
of Bank Distress – – – – – – – 14
2.1.5 Features
of Bank Distress – – – – – – – 16
2.1.6 Classes
of Bank Distress – – – – – – – 18
2.1.7 Symptoms
of Bank Distress – – – – – – – 18
2.1.8 Emergence
of Distressed Banks in Nigeria – – – – – 19
2.1.9 Causes
and Consequences of Distress in Banks in Nigerian – – – 20
2.1.10 Implications
of Banks Distress on the Nigeria Economy – – – 22
2.1.11 Possible Solutions to Banking Distress in
Nigeria – – – – 23
2.1.12 Concept and Determinants of
Economic Growth – – – – 25
2.2 Theoretical Framework – – – – – – – 28
2.3 Empirical Review – – – – – – – – 30
Chapter THREE
: RESEARCH
METHODOLOGY
3.1 Introduction – – – – – – – – – 33
3.2 Research
Design – – – – – – – – 33
3.3 Study
Area – – – – – – – – – 33
3.4 Sources
and Types of Data – – – – – – – 34
3.5 Models Specification – – – – – – – – 34
3.6
Operational Definition of Variables – – – – – 35
3.7 Data Analysis Techniques – – – – – – – 35
3.7.1 Decision
Rule – – – – – – – – – 36
Chapter FOUR
: DATA PRESENTATION, ANALYSIS
AND DISCUSSION OF
FINDINGS
4.1 Introduction – – – – – – – – – 37
4.2 Data Presentation – – – – – – – – 37
4.3
Data Analysis – – – – – – – – – 38
4.4
Test of Hypotheses – – – – – – – – 40
4.4.1
Hypothesis Number One – – – – – – – 41
4.4.2
Hypothesis Number Two – – – – – – – 43
4.4.3
Hypothesis Number Three – – – – – – – 46
4.5 Discussion
of Findings – – – – – – – 48
Chapter FIVE
: SUMMARY OF FINDINGS,
CONCLUSION AND
RECOMMENDATIONS
5.1
Summary of Findings – – – – – – – – 52
5.2 Conclusion – – – – – – – – – 53
5.3 Recommendations – – – – – – – – 54
5.5
Suggestions for Further Research
Work – – – – – 55
References – – – – – – – – – 57
Appendices – – – – – – – – – 62
LIST
OF TABLES
Table 1: Bank
Distress Indicators and Economic Growth in Nigeria
from 1990 to 2016 – – – – – –
Thesis Abstract
AbstractThis study examines the relationship between bank distress and economic growth in Nigeria. The banking sector plays a crucial role in the economy by facilitating financial intermediation and resource allocation. However, when banks are distressed, it can have significant negative effects on economic growth. Using time series data from 1986 to 2019, this study employs the Autoregressive Distributed Lag (ARDL) bounds testing approach to investigate the long-run and short-run dynamics between bank distress and economic growth. The results indicate a negative relationship between bank distress and economic growth in Nigeria, implying that periods of bank distress are associated with slower economic growth. The study finds that bank distress variables such as Non-Performing Loans (NPLs), Capital Adequacy Ratio (CAR), and Liquidity Ratio (LR) have a significant impact on economic growth. Specifically, an increase in NPLs and a decrease in CAR and LR are found to be detrimental to economic growth in Nigeria. Furthermore, the study explores the transmission channels through which bank distress affects economic growth. It is observed that bank distress can lead to credit rationing, reduced investment, and lower productivity, all of which can hinder economic growth. Additionally, bank distress may erode depositor confidence, leading to bank runs and financial instability, which further exacerbate the negative impact on economic growth. Policy implications arising from this study suggest the importance of maintaining a sound and stable banking sector to support economic growth. Strengthening bank supervision, enhancing regulatory frameworks, and improving risk management practices are crucial in preventing and mitigating bank distress. Addressing the root causes of bank distress, such as poor corporate governance, weak risk management, and inadequate capitalization, is essential for promoting a healthy banking sector that can effectively contribute to sustainable economic growth in Nigeria. Overall, this study contributes to the existing literature by providing empirical evidence on the relationship between bank distress and economic growth in Nigeria. The findings underscore the importance of addressing bank distress to ensure a stable financial system that can support long-term economic development and prosperity.
Thesis Overview
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