CORRUPTION PERCEPTION AND RETURN ON ASSETS OF DEPOSIT MONEY BANKS IN NIGERIA

Abstract

The objective of the study is to examine the relationship between corruption (CPI) and return on assets (ROA) of deposit money banks (DMBs) in Nigeria. The study employed error correction technique to examine how perceived corrupt practices (CPI) affect the profits accruable to the assets (ROA) of DMBs in Nigeria using data from 1996 to 2022. The results allude that corruption substantially impedes corporate progress and the yields accruing to the assets of DMBs in the country. Non-performing assets (NPLs) were also found to hinder the increase in the ROA of deposit-taking institutions in Nigeria. The study concludes that perceived bribery and dishonesty practices (CPI) have a substantial influence on the performance of DMBs in Nigeria. The empirical investigation highlights the undesirable long-term effects of corrupt practices on the efficient utilization of the assets of deposit-taking institutions in Nigeria. The study recommends the need for the Central Bank of Nigeria to enhance its supervisory efforts and deposit-taking institutions to strengthen and implement their corporate governance frameworks. By implementing robust supervision and strict measures, the study suggests that the incidence of dishonest behaviour in the sector can be curtailed. This would ultimately contribute to improved performance and stability of DMBs in Nigeria.