Banks and Banking
112 theses under this subject heading
The Macroeconomic Determinants of Credit Risk in the Banking Sector of Kyrgyzstan
Credit risk, i.e. the risk of loan default, is a significant risk faced by banks in every country. While banks make loans in order to generate income, by making loans they also face a risk of losing their principal and the interest. As part of their lending business, a small percentage of loan default (non-performing loans) is always expected. However, large volumes of loan defaults can push banks into bankruptcy and can cause financial instability in the banking sector. Therefore, it is important to know the factors affecting the credit risk, i.e. non-performing loans, in the banking sector. Especially in the newly established countries such as Kyrgyzstan, where most of the economic and financial policies are newly introduced and the banking sector is in its infancy, it is vital for the governments to understand the factors that increase the credit risk. This research uses the econometrics analysis to determine the macroeconomic factors that increase the credit risk in the banking sector of Kyrgyzstan. The findings indicate that real GDP growth rate, exchange rate of Som per US Dollar, corruption and the presence of political instability affect the credit risk in Kyrgyzstan. While GDP growth rate is negatively related with the credit risk, the exchange rate, corruption, and political instability are positively related with the same. The findings of this research suggest that in order to reduce the credit risk of banks and promote stability in the banking sector, the policy makers in Kyrgyzstan must promote political stability and economic growth, while the value of the local currency should be stabilized against US dollar. Furthermore the government must take actions to reduce high levels of corruption in the country. Keywords: NPLs, credit risk, banks, corruption, macroeconomy, Kyrgyzstan
Outreach and performance analysis of microfinance institutions in Cameroon
ABSTRACT: Since people with low incomes do not have access to financial institutions and in most developing countries, only public workers benefit from the services of public banks, the poor and private workers with low incomes cannot borrow from these public banks. Hence, micro financial institutions have become the answer to those who cannot benefit from the financial services of the public banks. This study tries to compare the performance and outreach aspect of the micro financial institutions in Cameroon against the African benchmark. Furthermore, it investigates if there is a tradeoff between performance and outreach. A total of 6 selected micro financial institutions with branches all over Cameroon were chosen for this study. Using the difference of mean test, the findings of the study revealed that generally, the micro financial institutions in Cameroon implemented a low cost strategy and are heavily exposed to default risk. We also concluded a tradeoff between the performance and outreach factors. Micro financial institutions in Cameroon are more focus at making profits rather than reaching out to the poorest of the poor in the communities. …………………………………………………………………………………………………………………………………………………………………………………………………………
Determinants of Banks Capital Structure: Empirical Evidence on Listed Commercial Banks in Turkey
Existing literature provides sufficient evidences consistent or/and contradict of the available theories of capital structure. On the other hand, the choice of capital structure for the non-financial firms substantially varies from financial institution especially banks. This motivates enough for further studies in particular in a fast growing country such as Turkey. The present thesis empirically examines the choice of leverage of 9 listed commercial banks as the function of 4 bank characteristics namely profitability, tax shield, collateral and dividend. The present thesis uses panel OLS regression considering the robustness and diagnostic tests of the model. The findings suggest a very small but negative impact of the profitability on the capital structure of the sample banks implying a consistency with the pecking order theory. Tax shields effects were found to be insignificant. Surprisingly, the impact of collateral found to be negative and statistically significant. Finally, we report a positive but very weak association between the dividend and the choice of capital structure of the sample banks.
The Impact of Corruption on Commercial Banks’ Credit Risk
This research explores the influence of country wide corruption on the commercial banks’ credit risk. It applies the quantile regression (QR) estimation method for a panel data of 191 commercial banks from 18 MENAP nations, between the years 2011-2018. The research finding indicates that corruption significantly exacerbates the problem of bad loans of commercial banks. Furthermore, the QR results reveal that corruption does not affect all commercial banks at the same level. Commercial banks in higher quantiles (i.e. higher credit risk banks) appear to be affected more than the ones in lower quantiles (i.e. lower credit risk banks). Commercial banks with a high credit risk tend to be more vulnerable to corruption than commercial banks with low credit risk.
Determinants of Commercial Banks’ Lending Behavior in South Africa
This study is carried out to investigate the factors that determine commercial banks’ lending behavior in South Africa. The model used for this study is summarized in South African commercial banks loans to total assets as the dependent variable and other predictor variables such as credit risk, equity risk, liquidity risk, management efficiency, and GDP growth for the period: 2007-2014. Using the panel data model and regression analysis, this research investigates if any relationship exists between the dependent variable and the specified independent variables. Also, it investigates the significant effect of these independent variables to the South African commercial banks’ lending decisions. This study discovered that the predictor bank specific and macroeconomic variables used were significant at alpha level 1% and 10% and influences banks’ lending behavior. In addition, credit risk, equity risk and management efficiency all have a positive significant influence whilst GDP growth and liquidity risk both have a negative significant impact on commercial banks’ decision to lend in South Africa. Keywords: Commercial banks, credit risk ratio, determinants of commercial banks’ lending, GDP growth, South Africa.
Evaluating the Performance of Public, Private and Foreign Banks Operating in Turkey
This study attempts to compare the financial performance of public, private and foreign banks operating in Turkey from 1997 to 2010, as well as conducts a pre and post global financial crisis performance analysis for public, private and foreign banks. The following profitability proxy indicators were used; Return on Assets (ROA), Return on Equity (ROE), Profit per Employee (PPE), Profit per Branch (PPB), Net interest Margin (NIM) and Growth in Net Profit (GINP). For this purpose, data of three public, three private and three foreign commercial banks were used. There were not significant differences of profitability among public, private and foreign banks before and after 2008. However, there is a significant difference in Net interest Margin before and after 2008 global financial crisis which shows that the financial crisis has affected the interest income of banks. On the other hand, other profitability indicators appear to remain unchanged after the global financial crisis. This indicates that banks compensated their decreased interest earnings with an increased income from financial services such as fees, commissions and other income. Keywords: Bank profitability, state banks, private banks, foreign banks, Turkey.
Evolving Time-varying Market Efficiency of Energy Stock Market
Energy stocks have become an essential segment of the investment portfolios of both households and institutional investors. This study investigates the dynamic aspect of evolving weak-form efficiency in six energy stock markets: those of the United States (US), Canada, China, Australia, India, and Saudi Arabia. The generalized autoregressive conditionally heteroskedastic in the mean GARCH-M(1,1) method is applied, alongside the state-space time-varying approaches and the Kalman-filter assessment, to detect the evolving efficiency for periods ending in November 2019. The empirical results reveal that the studied markets undergo various extents of time varying efficiency, containing periods of efficiency enhancement as well as periods of deviation from efficiency. Meanwhile, the 2007–2009 global financial crisis and the 2015 changes in the energy sector—in addition to other contemporaneous crises— have a profound influence on the timeline of market efficiency evolution. Overall, all of the markets gradually became more efficient, apart from India’s energy market as a result of the current energy crisis in India. Amid the energy markets explored in this study, the US energy market was found to be the most efficient.
Determinants of Profitability of Listed Commercial Banks: A Case of China
The method least square panel was adopted to analyze the determinants of profitability of 16 listed commercial banks in China, from 2010 to 2015. As found by the study, the profitability of listed banks is associated not only with the characteristics taken on by banks, but also with how the financial markets are structured. More evidently, the Non-performing loan losses ratio, reserve rate, and equity ratio are negatively correlated with the profitability. Markedly, Herfindal- Hirschman Index, X-Efficiency, Non-interest rate and profitability were positively correlated with each other. The z-score and profitability are not evidently positively correlated. To improve their profitability, China's listed commercial banks are required to facilitate their operation, control operating costs, increase efficiency, and further reduce the NPL ratio.
Determinants of profitability in domestic and foreign banks in Turkey
ABSTRACT: The most important instrument of financial system for the future of the economy is the profitability of banking sector. The goal of this research is to determine the specific bank factors that impact the profitability of 14 commercial banks in Turkish banking sector for the period of 2005-2011. The data are collected into two groups: Privately owned domestic and foreign Banks. Profitability measures are the operation of specific of bank that used to measure the bank performance. The bank specific determinants that effect the profitability are equity/total assets, total loans/total assets, interest income/interest expense, liquid assets/total assets, total assets and interest expense/deposit. Keywords: Profitability, Turkish, Banking. …………………………………………………………………………………………………………………………
Evaluating profitability and efficiency of bank performance in Palestine
ABSTRACT: Nowadays, the role of banks in economics is undeniable. All the financial activities are depending on them because they help to develop the economy quickly, so the profitability measurements of the banking system should be investigated. The goal of this study is to find the profitability measurements for 7 commercial Palestinian banks and the researcher will do that on an analysis of bank for the period 2005-2011. The Palestinian banks profitability will be done by evaluating two main parts of ratios; the first one is the bank specific ratios which are capital adequacy ratio, liquidity ratio, management efficiency ratio, and the last one is the asset quality ratio. In addition, the second part is macroeconomic determinants (inflation and interest rate). In this research, panel data is used to evaluate the relationship between the variables. The study followed the previous studies such as the case of Turkey (Alper and Anbar, 2011) that investigated the profitability to measure the bank –specific performance for 10 commercial banks for the period of 2002-2010 and they came out that there is a positive relationship between the interest rate and profitability and this result agrees with the statistical analysis for of this study’s case. The study concluded that the macroeconomic factors have more impact to the profitability of the banks in Palestine when compared to the bank specific determinants that exist because of the special structure of each bank, so for that the researcher concluded the study by suggesting some solutions to the problems faced in this study. Keywords: Palestine, panel data, bank profitability, macroeconomics factor, bank specific determinants. …………………………………………………………………………………………………………………………
A Comparaison of Different Banking Systems? Performance During Global Crisis: Conventional vs Islamic Banking
ABSTRACT: Though overall bank performance from 2007 to 2009 was the worst since at least the Great Depression, there is significant variation in the cross-section of banks performance across the world during that period. More specifically this study is going to investigate the performance of islamic and conventional banks during crisis by looking at 20 different banks from 4 diffrent countries. As we know banks that the market favored in 2006 had especially poor returns during the crisis. This study tests the performance of banks that belongs to two different sectors: a) Islamic Banks (IBs) and b) Conventional Banks (CBs). The study concentrates on the pre and post 2007 financial crisis with an aim to test if there are any significant differences in performance between the two sectors. Though canadian banks did not go bankrupt we provide some evidence that capital adequacy ratio has a significant impact on bank profitability in conventional banks. Moreover, we also found out that regulation does not affect islamic banks but management efficiency does. The reason why conventional banks were touch from the recession is because some banks that aim to maximize shareholders wealth before the crisis took some risks that were understood to create shareholder wealth, but were costly ex post because of outcomes that were not expected when the risks were taken. Another important point is that some of the financial crises derive from a human error but not from the regulation or governance. ……………………………………………………………………………………………………………………………………………………………………………………………………………………
Examining the Effects of Remittances, Labor Productivity and Trade on Real Effective Exchange Rate: Case of Turkey
Financial and economic development of a country is a crucial matter for every nation. There are various factors and elements that carry a major role in this regard and the literature shows numerous variables that are regarded as vital for this improvement. However, most studies examined countries in regions that are relatively far from the Middle East and Especially, Turkey. Hence, the current research entails a number of influential factors that have been noted to be significant for improving real effective exchange rate of the country, especially in the long-term. It is assumed that changes in Remittances, Labor Productivity, Trade (Openness) could impact on the changes in Real Effective Exchange Rate in the context of Turkey. These factors are remittances, labor productivity, and trade openness. It is important to note that while these factors have been under examination since early ages of research on econometric variables, the literature lacks consensus upon findings, particularly, empirical evidence. Thus, the current research aims to provide a better understanding of underlying effects and linkages among these variables. Data (2000-2017) from central bank of Turkey that was made public is used as well as indicators of OECD. Modern tools and analytical approaches have been undertaken to examine the relationships between the included factors and measures have been derived from the extant literature to ensure the reliability and validity of the results. All hypotheses of the research have been supported through data analysis. It can be said that increased remittances have a positive effect on a country’s real effective exchange rate in long-term. Increased trade openness was found to be negatively associated with REER. This is due to the fact that trade openness leads to increased price of domestic goods for other nations. Labor productivity is positively related with REER as Turkey exhibits high productivity in its labor, which further impacts its economic state in terms of effectiveness of its exchange rate. The findings of this research are aimed to contribute to the literature as well as practical approach towards analyzing and understanding connections among the aforementioned variables. Keywords: Real Effective Exchange Rate, Remittance, Labor Productivity, Trade Openness, Turkey, Economics.
The Impact of Foreign Banks' Operations on Credit Growth of the Banking Sector in Turkey
This study attempts to analyze the impact of foreign banks on the Turkish banking sector. It is generally accepted that foreign banks have a positive effect on the host countries financial sector in terms of increasing credit to the private sector and improving efficiency in the banking sector through competition. These outcomes however, may vary from country to country. This research examines whether the growing existence of foreign banks in Turkey had a significant impact on credit supply to the private sector. The empirical results showed that there is a positive relationship between the foreign banks existence in Turkey and the credit supply to the private sector. Keywords: Foreign banks, banking sector, credit supply, private sector, Turkey.
Comparative Analysis Between Islamic and Conventional Banking System In Term of Profitability and Governance
It is known the banking sector is play the main role in the economy in the world, whereas there are a lot of theories and studies was discussed especially after global financial crisis to explain over the Islamic banks affected by the last crisis. This research is going to comparison financial performance between Islamic banking and conventional banking in five countries. This comparison study will examine the financial performance for two different banking systems depending on the profitability ratios including Return on Equity and Return on Assets by using CAMEL approach in Malaysia, Pakistan, Egypt, Qatar and Turkey. In additional, good governance concept became an important factor recently, this paper will measure the impacts of governance factor on the profitability in Islamic and conventional banks. For this purpose, applying E-views program for estimate correlation and regression analyses to make hypotheses test then concluding the results by using F-test. The data in this research was extracted from financial annual reports of banks from 2008 to 2013. However, the results illustrate the difference of financial performance between Islamic banks and conventional banks. Keywords: Islamic Banks, Conventional Banks, Profitability and governance.
Adoption of Internet Banking in United Arab Emirates
ABSTRACT: Comparing internet banking with conventional banking in United Arab Emirates is the main purpose of this thesis. Internet banking services have been greatly expanded and are greatly used in United Arab Emirates. This study will try to answer our question that which one of the banking system is more profitable; hence which one of United Arab Emirates banks are using. They will use more of the system in order to maximize their profitability. In this study financial ratios are used and are particularly used to evaluate the banks in checking the performance of the two systems. For the process of evaluation, we will use E-views software which helps us in making the hypothesis in regards to t-test, f-test and regression analysis. Keywords: Internet Banking, Conventional Banking. ……………………………………………………………………………………………………………………………………………………………………………………………………………………
Bank Performance Evaluation in Emerging Market The Case of Turkey and Brazil
ABSTRACT: This study tries to investigate the banking performance in Turkey and Brazil as the two countries in emerging markets. Considering the many years as well as a sufficient number of the best banks in each country, and also using the CAMEL model as a powerful and strong ratio to evaluate the overall situation of banks has allowed us to have an accurate information about the banks’ performance. This study is focused on the years of recent global financial crisis and obviously tries to show the performance of the top banks in the selected countries. It is planned to measure the performance in terms of capital adequacy, asset quality, management, earnings and liquidity. For this aim, it is referred to most commonly used ratios in banking system. In this study, regression analysis is used to make the hypothesis test and determine the ratio significance. Consequently, the result of this study can be very useful for investors who look to diversify the markets considering that the expected markets are saturated in developed countries. Keywords : Emerging market , CAMEL , Financial crisisiv. …………………………………………………………………………………………………………………………
Impact of Credit Management on the Financial Performance of Banks: A Case Study of Canadian Banks
Credit is of a sensitive disposition not to be treated with utmost vigilance in any organization especially in banks which the circumstance is more significant. The aim of this study is to investigate the impact of credit management on the financial performance of banks. Panel data analysis was used to analyze the secondary data collected for 8 Canadian banks over the period of 16 years (2000-2015). In this study, return on assets (ROA) and return on equity (ROE) are used as a measure of banks‟ financial performance whereas non-performing loan ratio (NPLR), loan loss provision ratio (LLPR), loans to deposit ratio (LTDR), loans to asset ratio (LTAR), cost per loan asset ratio (CLAR) and total debt to total asset ratio (TDTAR) were used as proxies for credit risk. It was found that NPLR, LLPR, LTDR and CLAR were all statistically significant and inversely related to banks‟ financial performance (ROA) whereas LTAR was statistically significant and positively related to ROA. On the other hand, NPLR and LLPR were statistically significant and inversely related to ROE, while LTAR was positively related but LTDR, CLAR and TDTAR were all statistically insignificant. On the basis of the findings, it shows credit risk has a negative influence on financial performance of banks thereby saying good credit management is of utmost importance to banks. Therefore, banks need credit to survive and hence adequate attention needs to be paid to credit administration in banks.
Factors affecting the adoption of internet banking in Libya
ABSTRACT: Internet banking has become an important channel to diversify the pull of banking services and products. Many banks have started offering such services and willing to offer themonline, therefore making the servicesavailable at any time. The purpose of this study was toinvestigatethe affecting factors of adopting internet banking in Libya. For this purpose three hypothesesweredeveloped as a part of the research model. A questionnaire was prepared and distributed in order to collect the empirical data. A sample size of 235 respondents was analyzed in this study. Acquired data were analyzed with SPSS 20.0. The findings and the results of the research were based on T-test and correlation coefficient. In accordance with the statistical analysis results; it was determined thatthere was a relationship between the importance of providing electronic banking from the perspective of senior managers and its success in attracting customers and the provision of services. Even more, there was a relationship between the importance of the availability of electronic banking and the advantages that come in the case of the provision of online services. Above all, there was a relationship between the difficulties faced by electronic banking and its succession in providing services. Keywords: Internet banking, Libya, electronic banking, online services. …………………………………………………………………………………………………………………………………………………………………………………………………………
Capital Structure, Risk, and Performance of Banks: Empirical Study of Ghana and Nigeria
This study examines the determinants of bank capital structure in Ghana and Nigeria. It also sought to investigate the linear relation between capital structure and risk (Beta) of banks in Ghana. A panel data of 7 listed commercial banks in Ghana was analyzed over a period of 2008-2012, using a generalized least squares technique to estimate fixed and random effect regression models. At the same time, a panel data of ten commercial banks in Nigeria was also analyzed over the same span but from 2007 to 2011 for lack of data on some banks in the year 2012. The results indicate that liquidity, operating expenses, and return on average equity are the significant determinant of Capital Structure for both countries. All the variables except return on average equity have a negative association with leverage in the case of Ghana whereas liquidity and operating efficiency have a negative relationship with leverage in the case of Nigeria. These results are in line with corporate finance theory such as Trade-off theory, Agency Cost, Pecking order theory and signaling effect. This will help analyst and financial managers to understand the dynamics of capital structure in the banking sector of Ghana and Nigeria. Keywords: Capital Structure, Profitability, Equity Risk, Ghana, Nigeria
Comparison of Profitability Indicators of Commercial Banks: The Case of Jordan and Palestine
Banking system could be determined as one of the major drivers of the economy. Moreover, the banking sector is the most important financial intermediary as a channel of funds from people who have extra money (savers), to those who do not have enough money to carry out a desired activity (borrowers). Thus, indicators which are related with profitability of the banking system needs to be rated. The primary goal of the current study is to compare experimentally and measure the financial performance of conventional banks which are operating in Jordan and Palestine during the period of 2008-2014. Furthermore, in the current study, macroeconomic variables as well as financial ratios within a CAMEL approach. To create a good evaluation in terms of experimentally, most commonly practiced ratios are employed for the present study. Two profitability indicators which are used in the current study are dependent variables. Moreover, data is also monitored for sturdiness of the model and OLS method is utilized through adoption E-views program. Moreover, numerous articles which are related with banking literature were surveyed to shape most appropriate model. According to the result of this study it is shown that the profitability indicators are almost the same for both countries, in other words, can be said that there is no statistical difference between them. Keywords: Banking system, profitability, conventional banks, OLS, CAMEL, Jordan, Palestine.
The Impact of Internal Marketing on Employees Job Satisfaction and Social Responsibility: An Application to Turkish Republic of Northern Cyprus Banking Sector
The study aims to identify the impact of Internal Marketing to Employees Job Satisfaction in the Turkish Republic of Northern Cyprus (TRNC) Banking Sector both foreigner national to the on the Corporate social responsibility. Nowadays, the banking industry has to recognize the changes and challenges which facing them, this research also discussing findings from a descriptive study concerning internal marketing to employee job satisfaction in the TRNC banking industry. Due the aim of this concept IM, aimed at developing customers -consensus employees and turning service quality into an banks imperative. The underlying assumption is that viewing employees as one of the most banks assets and treating them as internal customers, while this factor will help banks executives identifying the critical dimensions of internal marketing which affects employee’s job satisfaction that affect the employees turnover rate. Therefore, recognizing the reality of interest in applying Internal marketing practices in the banking sector of TRNC and the importance of the corporate social responsibility practice role. Finally, Conceptual and operational definition of social responsibility, internal marketing and Job satisfaction were analyzed to generate an item pool for testing. Generalized items were then tested in the TRNC banking sector in the both national and foreigner (N=307). iv The data were integrated into the computer and processed using SPSS 22.0 statistical program and AMOS 22.0 and SEM which helped specify, estimate, assess and present models to show hypothesized relationships among variables. The main purpose of using this software to build models more accurately than with standard multivariate statistics techniques. Ratability validity of measurement model embassies when doing a CFA (Alpha Cronbach = 0.963).
Comparison of Profitability Indicators of Conventional Banking Systems: The Case of Azerbaijan and Turkey
ABSTRACt: The main purpose of this study is to do comparative analysis of commercial banks of two different countries: Turkey and Azerbaijan in terms of profitability indicators. According to the annual report of Credit Institution Rating, the banking industry of Turkey is considered to be one of the strongest industries of Europe and Asia regions, and it is obvious that Azerbaijan and other CIS countries are trying to pursue the same objectives as Turkey. In this research, 10 commercial banks were selected: 5 banks in Turkey and 5 banks in Azerbaijan, for the period of 2006-2012. Moreover, profitability indicators are proxied as return on equity (ROE) and return on assets (ROA). Explanatory variables or standard financial ratios are chosen according to the CAMEL approach. In order to find the statistical difference in financial performance of banks in two different countries, dummy variable is used. As a result, specific model and results have been found. It is found that there is no statistical difference in profitability determinants of the banks. And some significant relationship between variables was also found. Keywords: Commercial Banks, Turkey, Azerbaijan, CAMEL approach, Dummy variable. ………………………………………………………………………………………………………………………… OZ: Bu çalışmanın amacı, iki farklı ülkedeki; Türkiye ve Azerbaycan, ticari bankaların kar göstergeleri temel alınarak karşılaştırmalı analizini yapmaktır. Kredi değerlendirme kuruluşu olan Fitch şirketine göre, Türk bankacılık endüstrisi Avrupa ve Asya bölgelerinin en güçlülerinden biri olarak düşünülmektedir. Azerbaycan ve diğer BDT ülkeleri de Türkiye’nin ulaştığı noktaya varma amacındadırlar. Bu çalışmada, 5 tanesi Türkiye’den 5 tanesi Azerbaycan’dan olmak üzere toplam 10 banka 2006-2012 dönemi için örnek olarak alınmıştır. Ayrıca, kârlılık göstergeleri, varlıklar ve sermaye kârlılığı baz alınarak değerlendirilmiştir. Açıklayıcı değişkenler ve standart mali oranlar CAMEL yaklaşımına göre seçilmiştir. İki farklı ülke arasındaki finansal performans açısından istatistiksel farkı görebilmek için kukla değişkeni kullanılmıştır. Sonuç olarak, özellikli bir model ve sonuca ulaşılmıştır. Görülmüştür ki, bankaların kârlılık etkenleri arasında istatistiksel bir fark yoktur. Fakat değişkenler arasında belli bir seviyede olmak üzere belirleyici ilişki tespit edilmiştir. Anahtar Kelimeler: Ticari Bankalar, Türkiye, Azerbaycan, CAMEL yaklaşımı, Kukla Değişken.
Total quality management, commitment, and recovery performance in commercial banks of TRNC
ABSTRACT: This thesis investigates the impact of perceived total quality management feature on the service recovery performance of the banking industry in Northern Cyprus. The moderating effect of job satisfaction and affective commitment have also been considered in the study results from 150 employees working in the various banks show that perception of them on the TQM factors exert positive and statistically significant on not only job satisfaction and commitment but also on service recovery performance. Finally factor analysis test results also do reveal that findings from this questionaries’ survey are robust. Keywords: TQM, Satisfaction, Commitment, Recovery Performance, Banks. …………………………………………………………………………………………………………………………
Effect of Global Financial Crisis on Nigerian Economy and the Financial Sector
This research aims to study the effect of 2008- 2010 global financial crisis on Nigerian economy and on its financial sector. Secondary data was obtained from the World Bank, the Central Bank of Nigeria and the IMF World Economic Outlook. The economic indicators examined in this research are: unemployment rate, inflation rate, interest rate, non-performing loans, foreign direct investment, foreign exchange reserve, real GDP growth rate, and exchange rate. The regression analysis was conducted to examine the effect of unemployment caused by the global financial crisis on the country’s real GDP growth rate. Descriptive statistics including the mean, median and standard deviation was also used to analyze the data. Trend analysis was further used to analyze the trend of these indicators over the years. The findings of this research indicated that the inflation rate and banks’ non-performing loans have increased during the global financial crises, however they both moved back to their original levels during the post-crises period. On the other hand the negative effect of the global financial crises on unemployment, foreign direct investment and economic growth remained unchanged even after the post-crises period. Also the dependence of Nigerian economy on its petroleum exports makes its economic growth highly sensitive to the petroleum prices. As the petroleum prices fell during the post-crises period the economic growth of Nigeria was negatively affected. Keywords: Global financial crisis, Nigerian economy, Non-performing Loans, Foreign Direct Investment, Foreign Exchange Reserve, Gross Domestic Product, Exchange rates, Inflation rate, Interest rate, Oil prices, Trend analysis.