PLAGIARISM SCAN REPORT

Date 2023-01-02

0%
100%

Words 848
Plagiarised Unique

Characters 5494

Content Checked For Plagiarism

Empirical review

out to demonstrate the effect of monetary policy tools on the financial performance of commercial
The study is carried
banks. The main aim of this paper is to find out the effect of monetary policy on the financial performance of commercial
banks. All these studies supported that various monetary tools affect commercial banks’ financial performance.

Ayodele (2014), investigated how various macroeconomic variables such as interest rate, liquidity ratio, money supply, and
commercial bank loans and advances affect commercial bank lending. In this study, there has been employment of
secondary data and a time series analysis from the period of 1998-2008, which has been obtained from sources of the
Central Bank of Nigeria (CBN) and the National Bureau of Statistics (NBS). In this study, there has been the use of
inferential analysis with the adoption of the Augmented Dickey fuller (ADF) test for units, and the co-integrated test is
conducted through the Johansen cointegration test to determine whether there exists long-run relationship exist between
the variables. To reconcile the short-run behavior, an error correction model (ECM) has been used to determine the correct
prediction connection between monetary policy and commercial banks’ loans and advances. In this study, a cointegration
test was carried out to confirm and determine whether there exists a long-run relationship among the variables. The
Johansen co-integration test revealed that there exists a long-run relationship between Commercial loans and advances.
This paper has concluded that there have been possible effects of monetary policy on commercial bank lending in Nigeria.
The analysis was done using the Bank lending channel mechanism model, Loan pricing theory, and multiple lending theory
as the theoretical framework that incorporates the role of monetary policy. The study has shown that using the error
correction mechanism of the ordinary least squares regression technique, efforts of monetary policy at influencing the
volume of commercial banks loan and advances in Nigeria through exchange rates and money supply do not influence the
volume of commercial bank loans and advances.

Akomolafe, Danladi, Babalola, & Abah (2015) investigated the impact of monetary policy on commercial banks’
performance in Nigeria in a micro-panel analysis. Interest rate and money supply were used as a core basis in order to
explain the detailed effects of monetary policy tools whereas profit before tax (PBT) was used in order to represent
commercial banks’ performance. For the purpose of carrying out the research pooled regression, fixed effect regression,
and random effect regression were adopted in order to obtain a detailed analysis of the study. Hausman’s test concluded
that fixed effect regression was most desirable in order to carry out the detailed study. An overall analysis of the study
concluded that there is a positive relationship between banks’ profits and monetary policies as concluded from money
supply and interest rates. At 1% and 5% interest rate was not statistically significant. From the overall analysis of the study,
it has been concluded that interest rate policy is needed to be carefully analyzed by the monetary authority so that there
will be great loan advancement in the country. For the purpose of carrying out the study, there has been taken of data
from 10 years of records for five banks. The relevant data obtaining data has been collected from the annual statement of
the bank whereas the data related to the monetary policy has been taken from the CBN statistical Bulletin (2014). For the
purpose of carrying out the relevant information, there has been done of pooled regression, fixed effect regression,
random effect method, and the Hausman test. The analysis of fixed effect, regression shows that there is a positive
relationship between banks’ profit and money supply. From the overall analysis there came the conclusion is that there has
been a greater impact due to monetary policy. Monetary policy greatly impacts the overall performance of the commercial
bank. Profit before tax was used in order to represent the financial performance of commercial banks. Capital adequacy

Page 1 of 2
and management efficiency capture banks’ individual characteristics. Hausman’s test concluded that fixed effect regression
came to be most relevant in order to know the desired result of the study. From the overall analysis, it came to know that
there exists a positive connection between the dependent variable and money supply, interest rate, and management
efficiency whereas capital adequacy shows that there is a negative effect on banks’ profit. Overall findings gave the
conclusion that interest rates have not always become the main element in promoting banks’ profit in Nigeria. This came
to the conclusion that the Interest rate in Nigeria has not made loan advancement important in the country. A negative
effect of capital adequacy is also taken into the consideration in a way that banks in Nigeria do not manage their capital
properly. From the overall study, it has been recommended that interest rate policy should be carefully analyzed by the
monetary authority so that there will be great loan advancement. This process leads the significant profit to the bank.
Banks should also ensure that capital are to be properly utilzed so that there will be loan advancement in the country.

Matched Source

No plagiarism found

Page 2 of 2