Financial sector sustainability and performance – Policy Imperative for the monetary authorities'

Richard Osadume (Marine Economics and Finance, Nigeria Maritime University, Warri, Nigeria)
Anthony Ojovwo Okene (Marine Economics and Finance, Nigeria Maritime University, Warri, Nigeria)

Journal of Money and Business

ISSN: 2634-2596

Article publication date: 23 August 2021

Issue publication date: 24 September 2021




The objective of this study is to ascertain whether financial sector sustainability had any correlation with financial sector performance in Nigeria and recommend appropriate policy directions.


The study selected four major Nigerian banks namely Zenith Bank Guaranty Bank United Bank for Africa and First Bank of Nigeria as its sample and covered 2010 to 2019. Secondary panel data were obtained from the published financial Statements of the banks and subjected to analytical techniques of panel unit root tests descriptive statistics panel least square and Co-integration statistical techniques at the 5% level of significance.


The findings revealed that the exogenous variables (SUST) have significant Impact on the endogenous variable (ROA, ROE) in the short-run but insignificant in the long run.

Research limitations/implications

The period covered was limited to 10 years and has an African development focus with emphasis on West Africa, Nigeria. However, the implication could be general to most or all economic and financial landscape. It shows that there is a correlation between financial sector sustainability and return on assets and returns on equity.

Practical implications

Monetary authorities should develop applicable annual performance sustainability framework for all banks; and set performance targets, that will be measured and monitored by appropriate regulatory unit periodically.

Social implications

The financial sector survival is directly related to its contribution towards the survival and development of its host community and operating environment.


This approach is novel in the sense that its approach is practical and measurable, which most research work have not focused on.



Osadume, R. and Okene, A.O. (2021), "Financial sector sustainability and performance – Policy Imperative for the monetary authorities'", Journal of Money and Business, Vol. 1 No. 1, pp. 24-41.



Emerald Publishing Limited

Copyright © 2021, Richard Osadume and Anthony Ojovwo Okene


Published in Journal of Money and Business. Published by Emerald Publishing Limited. This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at

1. Introduction

Sustainable banking principles refers to various principles, policies and practices evolved by the monetary authorities that enhance banking services provision and their long-term existence as a going concern (CBN, 2012; IISD, 2012). The focus of such policies will include the community and the environment, how to better such operating environments, owing to expected spinoffs from such relationships. Contributions to the environments come in different forms ranging from healthy operational practices, to incorporation of locals through employment provisions, scholarships to local indigenes, and provisions of financial and other essential infrastructures for the betterment of the communities and mutual co-existence (Bowman, 2011; Ahuja, 2015). The foregoing practices are generally referred to as Corporate Social Responsibilities and in this study will be used to proxy Sustainability.

Financial Performances are generally measured by the returns on its utilised assets as well as returns accruing to shareholders, while the former is known as returns on assets (ROA), the latter is known as return on equity (ROE) (Orlitzky et al., 2003; Callan and Thomas, 2009; Saunder et al., 2012). While some of these researchers were able to establish a positive nexus between corporate or financial sustainability and financial performance others disagreed on the existence of any possible tradeoff and/or link between corporate sustainability and financial performance (Nobanee and Ellili, 2019; Islam et al., 2012; Neiling and Webb 2009).

Banking can be traced back to the zero BC (Goyal and Joshi, 2011) banking exist for the benefit of various stake holders (Clifton and Amran, 2011). In the past, there was wrong concept about banks that they have no business with environmental development (Ahuja, 2015). At the inception of the sustainability project by the Central banks, there were undue concentration on social initiatives at the detriment of environmental issues (Bowman, 2011; Goyal and Joshi, 2011). As the banking landscape evolved, greater emphasis was placed on environmental friendly operations (Meena, 2013; Sahoo and Prasad, 2007; Shakil et al., 2014). This strategy should focus on environmentally friendly banking practices (David and Shameem, 2017; Shaumya and Arulrajah, 2017).

Banks play a pivotal role in engineering sustainable development, and monetary authorities have realised that poor performance of its environment was a threat to banking business survival and success. There is a link between bank's profitability performance and its positive contributions to its environment's performance.

The justification for this study is to determine whether sustainable banking affects bank financial performance. Most Nigerian banks have evolved corporate social responsibilities towards their environment in which they operate, and we are concerned whether there is a tradeoff between such contributions to the environment and the benefits they derive from such relationships. The main objective of this study is to elucidate the key determinants of sustainable banking practices in the Nigerian context. The specific objectives of this study will include:

  1. To determine whether financial institution's sustainability has any impact on their RoA.

  2. To evaluate whether financial institution's sustainability has any impact on their RoE.

1.1 Hypothesis testing

This research work will be guided by the following hypotheses;


Financial institution's Sustainability has no significant impact on their return on assets.


Financial institution's Sustainability has no significant impact on their return on equity.

2. Review of related literature

This section considers in-depth related literatures on financial institution's sustainability and related frame works. Bank's business operation would impact their business and operating environments, such outcome could either lead to positive trajectories in its business or unexpected shutdown in its operations.

2.1 Central Bank sustainable banking frame work

Nine sustainable banking principles were identified by the Central Bank of Nigeria (CBN, 2012), namely:

  • Principle 1 Environmental and Social Risk management affecting bank's business operations.

  • Principle 2 Environmental and Social footprint affecting business operations of Banks.

  • Principle 3 Need to respect human rights in bank's business.

  • Principle 4 Banks' requirements to promote woman's economic empowerment activities.

  • Principle 5 Banks' pledge to pursue Financial Inclusion.

  • Principle 6 Provision of Environmental and social governance practises.

  • Principle 7 Banks' involvement in Capacity Building programmes for their staff.

  • Principle 8 Banks' playing collaborative partnership both locally and internationally.

  • Principle 9 Banks must report on their progress at institutional and sectoral level.

2.2 Challenges to effective sustainability frame work implementation

IFC (2012) and Masukujjaman et al. (2016) identified several impediments to a successful sustainability framework implementation and they include the following:

  1. Insufficient government support

  2. Difficulty in attraction relevant customers towards clean energy initiatives/practises

  3. Difficulty I n channelling credit to green sector areas

  4. Lack of leadership in the green banking field

  5. Inadequate knowledge of the business case

  6. Higher adoption cost

  7. Limited research work in this area

2.3 Theoretical discussion

There are several theories that support sustainability banking including institutional theory, the good management theory, the slack resources theory and the stakeholders' theory. The relevant theoretical frame work this study adopts is the institution theory and stakeholders theory. While the institution theory holds that external environment puts pressure on an organisation and forces such organisation to change their policies, procedure or structures. It holds, that an institution changes under external pressure in order to win specific resources or to reach social and economic legitimacy. An institution is a body or frame work or establishment, either social or political or economic that carries out its activities within the ambits of the law, rules and worms in competition with organisations (Dimaggio and powell 1983; Hoejmose et al., 2014; Lin and Sheu, 2012; Pleasant et al., 2014). This theory recognises four independent variables: (1) top management pressure, (2) customer pressure, (3) community pressure and (4) competitors pressure (Sarkis et al., 2010; Freeman, 1984; Amran and Usman, 2015).

The stakeholders' theory was postulated by Milton Freeman (Saunder et al., 2012) and argues that firms exist to add value to all stakeholders to a business including employees, government, suppliers, investors, customers and the community; hence, firms must maximise stakeholders' value and emphasises an interconnection between the business and its various stakeholders, that they should serve the needs of stakeholders and not just shareholders. A stakeholder approach is relevant as it promotes the study of how firms function as part of the larger environment and how its modus operandi affects the stakeholders of the firm.

2.4 Empirical discussion

Several researches carried out on subject have failed to come to a consensus on the likely outcome of various sustainability measures undertaken by corporations and institutions on their financial performances. Notable among such empirical arguments are;

Orlitzky et al. (2003) studied sustainability-financial performance relationship and found that accounting based measures of financial performance had a stronger and significant relationship to corporate sustainability performance using market based parameters. In similar vein, Callan and Thomas (2009) made attempt to study the nature of relationship between sustainability performance and financial performance and concluded that using accounting based measures of firm profitability, there exists positively significant relationship between both RoE and returns on sales and sustainability performance. Also, Saunder et al. (2012), using stakeholders' theory in the study of the relationships, discovered that there was a positive correlation between financial performance measured by ROA and sustainable performance.

Also, Case (2012) argued in favour of philanthropy-giving back to the community from business profits of organisations, necessary to aid the going concern status of a business. They further argued that it entails refusal from investing in businesses having negative social impact. Some researchers argue that some banks and finance service industries as a result of lack of sustainable practices, have incurred massive distrust of their host communities (Rogers, 2013) while Wolk (2012) opined that focusing on environmental, and social governance, will lead to a sustainable productivity for a bank. Studies by Mehmet et al. (2019), Platonova et al. (2018) and Mallin et al. (2014), all discovered that sustainability practices will lead to positive correlation with the organisations' financial performances. Most of these studies used RoA and RoE as dependent variables while the methodology employed were panel fixed effect regression and Ordinary least square and two-step least square and Three-step least square regressions.

However, similar studies were carried out in the UAE by Nobanee and Ellili (2016) using growth in interest incomes as dependent variable and GMM as Methodology, and discovered a negative impact on financial performance. In the same vein, Islam et al. (2012) investigated at Bangladesh while Neiling and Webb (2009) researched in the USA, with both using RoE as dependent variable; t-test and fixed effect panel regressions respectively as statistical methods, and discovered an insignificant impact on firm's financial performance. Hence, there is no consensus on the exact effect of sustainability practices on organisation's financial performance. Similar insignificant results were arrived at by Chapple and Moon (2005).

3. Methods and materials

This section considers the various types of data used in this study from selected sources, the model estimations as appropriate and the relevant tests that will be conducted on the selected variables and model estimations during the analytical stage of the study.

3.1 Research design

  1. This study aimed at setting up policy standard that will help the CBN and the government to effectively track contributions by the financial institutions to their environments and host communities that will make long-term impact. The study used panel secondary data obtained from the annual accounts of selected study banks and from their five year financial summary covering 2010 to 2019.

3.2 Variable and model specification

  1. This work is modelled with reference to Orlitzky et al. (2003), Saunder et al. (2012) as well as Platonova et al. (2018), which used variables including ROA and ROE.



The controllable variables may include firm size and debt ratio as enumerated in Orlitzky et al. (2003).


The variables for the selected sample will utilise panel data series as it considers several subsets in the Nigeria banking Landscape, which constitutes panel data series.

The panel data models will become:

  • SUST = sustainability banking ratio of CSR to PBT

    [CSR is corporate social responsibility and is computed as monetary value of all Contributions to the environments in healthy operational practices, employment to the local community, scholarships to local indigenes, and provisions of financial and other essential infrastructures; while, PBT is profit before tax of the companies]

  • ROA = return on assets [Is a financial ratio that shows the percentage of profit a company earns in relation to its overall resources or assets]

  • ROE = return on equity [This ratio measures the profitability of a business in relation to the equity or funds from the shareholders, known as ratio of net income to shareholder's equity]

  • FIRS = firm size = Shareholders equity/Total Assets [This is the scale of operations turned out by a business]

  • DEBR = debt ratio = Total debt or total liabilities/Total Assets [Financial ratio that shows the percentage of a company's assets provided through debt]

  • α0 = intercept term

  • Β = vector of parameters

  • μ = error term

  • it = panel data variables

  • Apriori Expectation

  • ROA, ROE >0< SUST (positive and significant)

3.3 The Nigerian banking landscape prior to 2020 and sample selection basis

The banking landscape in Nigeria comprised 15 banks with all sharing a cumulative average shareholder's fund of N2,928.223 trillion (as at December 2019), and our selected sample (FBN, Zenith, GTB and UBA Plc) held a combined N2,890.329 trillion of this shareholder's fund translating to 98.71%. This outcome best justified our reason for narrowing the sample selection to these four banks (Patton, 2012).

3.3.1 Review of selected financial institution sustainable banking practices

This study selected four major commercial bank (GTB) Category institution namely: Zenith bank PLC (Zenith), Guaranty Trust Bank PLC, United Bank for Africa PLC (UBA PLC) and First Bank holding PLC of Nigeria (FBN PLC); the research adopted the CBN Financial Sector Sustainability principles (2) and principle (8) (earlier stated in this study) and these were assessed using return on Equity (ROE), ratio of CSR to PBT, and return on assets (ROA).

  1. Zenith Bank PLC

Zenith bank is the foremost financial institution in Nigeria that commenced banking business on May 30, 1990 and currently has 7,594 employees with 48% being female (Zenith, 2019). The banking group earned an average CSR/Profitability to 1.24% of average PBT (Zenith Bank Plc, 2010–2019).

  • (2)Guaranty Trust Bank PLC

This bank was incorporated in 1990 and commenced operation in February 1991. The bank has a total staff strength of 5,361 and 2,413 is female which translate to about 45% of its work force. ROE, ROA and CSR to PBT for the 5 years 2019 December 31st shows an average ROE of 0.33%, ROA of 0.058 and 0.3108% (Guaranty Trust Bank Plc, 2010–2019).

  • (3)United Bank of Africa

UBA Plc is known as the leading pan Africa bank with a global footprint. Established in 1946 as a full fledge retail and commercial bank, currently employing over 12, 889 staff with 5, 839 being female representing an estimated 45% of its work force. An x-ray of the bank's 5-years average performance shows average ROE of 0.2483% and a ROA of 0.0237% and an average of 0.8164% was CSR/Profitability (United Bank for Africa Plc, 2010–2019).

  • (4)First Bank Holding PLC

FBN Plc was established in 1894 as Nigeria's foremost retail bank and known as Nigeria premier Bank, known for its rich history and customer base is engaged in commercial and whole sale banking business. It presently has over 9,159 employees with about 48% being female. Its 5-year financial summary showed average ROE, average (ROA) were 0.082 and 0.00092% respectively, CSR/Profitability average of 1.459% (First Bank of Nigeria Plc, 2010–2019).

3.4 Overview

It will be observed that while these selected financial institutions have excelled in Principle four-woman economic empowerment (principle six), business operation impact in their environment of operations (principle two) and collaborative partnership (principle eight) in terms of giving back to their hosts communities, as seen from their CSR and other contributions to PBT performance appears poor relative to stakeholders' earnings.

4. Results and discussions

Tables 1–7 were all extracted using Eviews-10 software, from Tables A1–A4 in the Appendix section of this research paper.

4.1 Analysis

Table 1 shows the stationarity tests for the panel data series using Levin, Lin and Chu (LLC). All the panel variables were found to be stationery at even with significant positive sign of 0.0000, hence we reject the null hypothesis of the presence of unit root and accept the alternative at the 5% level of significance, that there is no unit root in the panel data. The control variables, however, were integrated at the first difference levels.

The mean, median and standard deviation show even spread and variations for the series, depicting positive and healthy trend. The kurtosis is below 3 for the dependent variables but above 3 for the independent variable SUST showing mesokurtic and platykurtic tendencies respectively. The DEBR and SUST dependent variables show a Jarque-Bera statistics of significant p-value (0.000000) but insignificant for the dependent variables of ROA and ROE. This signs indicates departure from the features of a normal distribution for the variables.

4.1.1 Hypothesis testing I

  • H1. Financial institution's Sustainability has no significant impact on their return on assets

The result of above test hypothesis is shown in Tables 3 and 4.

Table 3 shows the panel linear regression impact of ROA on financial sector sustainability (SUST) using the control variables, Debt ratio (DEBR) and firm size (FIRS). At a lag of three (−3), financial sector sustainability showed a negative but significant relationship to return on assets with a p-value of 0.0292 at a 5% level of significance. The result indicates that a 1% rise in investments in financial sector corporate social responsibility being proxy by SUST, will result to a 0.003462 decline in RoE. The control variables at a lead of three levels showed a significant impact on ROA. The Durbin–Watson at 2.298209 shows that the linear model is resistant to autocorrelation errors while the R2 and adjusted R2 at 94.99 and 93.62% shows a goodness fit for the model and its ability to take on more variables.

A cointegration test using Pedroni Residual tool in Table 4, showed that there is no long-run correlation between ROA and SUST as the p-value at the 5% level of significance for all the statistics are all insignificant being above 0.05%.

Decision: From the foregoing, we conclude that while there is a significant impact of SUST on ROA in the short-run, there is an insignificant impact in the long-run. Hence, we reject the null hypothesis, to accept the alternative that financial institutions sustainability has significant impact on the financial sector's return on assets.

4.1.2 Hypothesis testing II

  • H1. Financial institution's sustainability has no significant impact on their return on assets

In this sector, we shall test the nature of impact which financial institution's sustainability exercises on return of equity using panel linear regression and Pedroni residual cointegration tests.

The panel least squares regression result in Table 5 shows that at a lag of 2 points, the financial institution's corporate social responsibility contributions proxy by SUST shows a very significant impact on ROE for the sector with a strong p-value of 0.0107 at the 5% chosen level of significance. Again, the Durbin Watson at 1.737902 is a good indication that the developed model is to autocorrelation errors resistant while the R2 and adjusted R2 at 75.44 and 69.31% shows a goodness of fit for the model and its ability to take on more variables.

Similar explanations in Table 4 is applicable to Table 6, which indicates an insignificant cointegration between SUST and ROE, for the various test statistics at the 5% level of significance, all being greater than the 0.05 threshold.

Decision: Based on the outcome from Table 5 and Table 6 and the accompanying notes, we conclude that significant relationship does exist in the short-run between financial sector performance measured by return on assets and financial sector's sustainability measured by the sector's social corporate responsibility contributions. Hence, we reject the null hypothesis again, to accept the alternative that the financial sector sustainability has significant impact on the sector's ROE.

4.1.3 Further cointegration testing

A further panel co-integration confirmatory test was carried out using combined variables in Table 7, and we discovered a significant impact of the sustainability on assets (ROA) and equity (ROE) returns with panel PP and panel ADF weighted probabilities of 0.0003 and 0.0007 respectively being significant at the 5% level of significance. However, this is opened for further studies as our focus in this research is on sustainability impact on specific performance variables such as ROA and ROE.

4.2 Discussions

The study researched on Financial Sector Sustainability and the Nigeria Financial System – Policy Imperatives for the Monetary Authorities. The work selected a sample of four major banks that controls about 70–80% of financial transactions in Nigeria as on the basis of shareholders' funds, contributes over 98.70%, namely Zenith bank Plc, United Bank for Africa Plc, First Bank Plc and Guaranty Trust Bank Plc. The objective of this study was to empirically investigate whether the independent variables ROA and ROE) exerts any impact on the dependent variable (Financial sector sustainability) using principle 2 and principle 8 highlighted in the literature. The parameters considered include Return on Assets (ROA) and Return on Equity both as dependent variables, to measure financial performance while corporate social responsibilities (SUST) was the independent variable and period covered was 10 years (2010–2019); The short-run tests using panel least squares regression for hypothesis one, showed a negatively significant impact of financial sector sustainability (p-value = 0.0292) on Return on Assets (ROA), while for return on equity, financial sector sustainability showed a negative but significant impact (p-value = 0.0107) with a level of 5% significance. The outcome of this finding is supported by the result of the work of Mehmet et al. (2019), Platonova et al. (2018), and Orlitzky et al. (2003), as well as Saunder et al. (2012), all who discovered a significant relationship between sustainability practises and company financial performance; this result is also in consonance with the theoretical analysis of institutional and stakeholder's theory. However, the long-run test using Panel Kao residual Co-integration tests for both hypothesis, recorded an insignificant impact on both ROA and ROE (p-value being above 5% in both cases) by financial sector sustainability. This result corroborates the research findings of Islam et al. (2012), Neiling and Webb (2009), and Nobanee and Ellili (2016) of an insignificant long-run effect. The result of this work however, does not agree with the findings of Chapel and Moon (2005) of a positive and significant long-run relationship between ROA and company sustainability.

Policy implications: From the findings of this work, it shows that a 1% increase in corporate sustainability such as CSR will result to 0.003462% decline in Return on Assets of the financial institutions, and also, a 1% rise in corporate sustainability, will significantly impact the financial sector's return on equity, leading to a 0.088454% fall in the short-run. This result further reveals that banks received the impact of these sustainability efforts/indicators only in the short run. We are concerned by the outcome of this study because rather than show a positive outcome on financial performance, it is leading to a negative and significant impact. This suggests that monetary authorities in Nigeria should urgently investigate the nature and economic effects of the various corporate sustainability measures being carried out by the commercial banks in their operating environments, and be able to determine whether such contributions are leading to growth in such communities' gross domestic output.

5. Conclusion

This research work studied Financial Sector Sustainability and Performance – A Policy Imperative for the monetary authorities' using four major banks in Nigeria as sample with Sustainability measured by ratio of CSR and other contributions to the environment, to Profit before Tax as independent variable while return on assets and return on equity were used as the dependent variables to test the short-run and long-run effects of ROA and ROE on Sustainability and covered 2010 to 2019. The findings showed that corporate sustainability of the financial sector showed a negative but significant impact on return on assets and return on equity in the short-run on sustainability while in the long-run the impact was insignificant. This study concludes that financial Performance is affected by corporate sustainability practises and indicators, significantly in the short-run but not in the long-run.

This study recommends

  1. That monetary authorities should develop a measurable sustainability framework that every financial institution should commit to annually toward the development of their host communities and environments. This will ensure uniform contribution standards for all financial institutions.

  2. That the sustainability framework should be targeted at specific projects, measurable and regularly monitored by specific compliance and regulatory units.

Panel unit root test

VariableLLC test statisticCritical Value@5%p-valueLevel of integration

Source(s): E-views 10 Computation of the author(s)

Descriptive statistics

Std. Dev1.3533420.0306460.0153950.0819940.764266
Sum sq. Dev69.598300.0356890.0090060.25547422.19589

Source(s): E-views 10 Computation of the author(s)

Panel least square result

Dependent variable: ROA
Method: Panel EGLS (period weights)
Linear estimation after one-step weighting matrix
Period weights (PCSE) standard errors and covariance (df corrected)
VariableCoefficientStd. Errort-statisticProb
SUST (−3)−0.0034620.001381−2.5067510.0292
DEBR (3)−0.0039880.000613−6.5052350.0000
FIRS (3)0.3584650.0359329.9760890.0000

Source(s): E-views 10 Computation of the author(s) (Table A5)

Cointegration test results for ROA/SUST impact

Pedroni residual cointegration test
Null hypothesis: No cointegration
Alternative hypothesis: Common AR coefs. (Within-dimension)
Panel v-statistic−1.7001000.9554−1.7532130.9602
Panel rho-Statistic0.0745290.5297−0.1108730.4559
Panel PP-Statistic−1.1071400.1341−1.3841300.0832
Panel ADF-Statistic3.5931780.99984.9959181.0000

Source(s): E-views 10 Computation of the author(s)

Panel least square result

Dependent variable: ROE
Method: Panel least squares
Period weights (PCSE) standard errors and covariance (d.f. corrected)
VariableCoefficientStd. Errort-statisticProb
SUST (−2)−0.0884540.029304−3.0185090.0107
DEBR (3)−0.0368870.007948−4.6412080.0006
FIRS (−3)0.7083410.3009342.3538050.0365

Source(s): E-views 10 Computation of the author(s) (Table A6)

Cointegration result for ROE/SUST impact

Pedroni residual cointegration test
Null hypothesis: No cointegration
Alternative hypothesis: Common AR coeffs. (Within-dimension)
Panel v-statistic−1.6958180.9550−1.7532100.9602
Panel rho-statistic0.1204370.54790.0769550.5307
Panel PP-statistic−0.9755590.1646−1.0066630.1570
Panel ADF-statistic3.8146840.99994.5251371.0000

Source(s): E-views 10 Computation of the author(s)

Cointegration Results for combined (ROA and ROE)/SUST Impact

Pedroni residual cointegration test
Null hypothesis: No cointegration
Alternative hypothesis: Common AR coeffs. (within-dimension)
Panel v-statistic−1.9204890.9726−2.1104190.9826
Panel rho-statistic1.3002210.90321.2093760.8867
Panel PP-statistic−2.0045250.0225−3.4540030.0003
Panel ADF-statistic−2.0537150.0200−3.2036040.0007

Source(s): Author's E-views 10 computations

Zenith bank PLC

YearABCDSUST = CSR/PBTROE = A/CROA = A/DEDebt ratio = E/DShareholder equity ratio = C/D
PBT (#B)CSR (#B)Shareholders fund (#B)Total Assets (#B)Total debt (N'Bn)

Source(s): Zenith Bank Plc Annual Accounts, 2020 and Authors computation, 2020


YearABCDSUST = CSR/PBTROE = A/CROA = A/DEDebt ratio = E/DShareholder equity ratio = C/D
PBT (#B)CSR (#B)Shareholders fund (#B)Total assets (#B)Total debt (N'Bn)

Source(s): UBA Plc Annual Accounts, 2020 and Authors computation, 2020

First Bank Plc

YearABCDSUST = CSR/PBTROE = A/CROA = A/DEDebt ratio = E/DShareholder equity ratio = C/D
PBT (#B)CSR (#B)Shareholders fund (#B)Total Assets (#B)Total debt (N'Bn)

Source(s): First Bank Plc Annual Accounts, 2020 and Authors computation, 2020


YearABCDSUST = CSR/PBTROE = A/CROA = A/DEDebt ratio = E/DShareholder equity ratio = C/D
PBT (#B)CSR (#B)Shareholders fund (#B)Total assets (#/B)Total debt (N'Bn)

Source(s): GTB Plc Annual Accounts, 2020 and Authors computation, 2020

Dependent variable: ROA
Method: Panel EGLS (period weights)
Linear estimation after one-step weighting matrix
Period weights (PCSE) standard errors and covariance (df corrected)
VariableCoefficientStd. Errort-statisticProb
SUST (−3)−0.0034620.001381−2.5067510.0292
DEBR (3)−0.0039880.000613−6.5052350.0000
FIRS (3)0.3584650.0359329.9760890.0000
Weighted statistics
R-squared0.949892Mean dependent variance0.032938
Adjusted R-squared0.936226SD Dependent variance0.019883
SE of regression0.004839Sum squared residual0.000258
F-statistic69.50839Durbin–Watson statistic2.298209
Prob (F-statistic)0.000000

Source(s): E-views 10 Computation of the author(s)

Dependent variable: ROE
Method: Panel least squares
Period weights (PCSE) standard errors and covariance (df corrected)
VariableCoefficientStd. Errort-statisticProb
SUST (–2)−0.0884540.029304−3.0185090.0107
DEBR (3)−0.0368870.007948−4.6412080.0006
FIRS (−3)0.7083410.3009342.3538050.0365
R-squared0.754469Mean dependent variance0.216644
Adjusted R-squared0.693087SD Dependent variance0.083676
SE of regression0.046356Akaike info criterion−3.092611
Sum squared residual0.025787Schwarz criterion−2.899464
Log likelihood28.74089Hannan-Quinn criterion−3.082720
F-statistic12.29124Durbin–watson statistic1.737902
Prob (F-statistic)0.000571

Source(s): E-views 10 Computation of the author(s)


1. Financial metrics table – Zenith Bank Plc, covering 2010–2019

2. Financial metrics table – United Bank for Africa Plc, covering 2010–2019

3. Financial metrics table – First bank Plc, covering 2010–2019

4. Financial metrics table – Guarantee Trust Bank Plc, covering 2010–2019

5. Table 3 – Panel least square result

6. Table 5 – Panel least square result


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The authors wish to thank the executive managements of the various banks sampled in this work for the use of their financial statements and also the Central bank of Nigeria. The authors equally appreciate the council of King Khalid University, Saudi-Arabia for the in-depth double-blind peer review process of our manuscript, and sponsorship of the publication of this article in Emerald Publishing.

The authors wish to state that they have not received any funding from any organisation or individuals to carry out this research.

Corresponding author

Richard Osadume can be contacted at:

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