Determinants of Banking Stability in Nigeria

CBN Bullion, Vol 43, No 2., 2019

14 Pages Posted: 10 Jun 2019

See all articles by Peterson K Ozili

Peterson K Ozili

University of Essex - Essex Business School; Central Bank of Nigeria

Date Written: 2019

Abstract

This study investigates the determinants of banking stability in Nigeria. Banking stability is crucial for economic growth and financial development. This study uses aggregate outcomes rather than individual bank performance to analyze the determinants of banking stability in Nigeria. Using aggregate outcomes allows us to focus on the changes occurring in the banking industry as a whole. The findings reveal that bank efficiency, the size of nonperforming loans, regulatory capital ratios, greater financial depth and banking concentration are significant determinants of banking stability in Nigeria. The findings have implications. One implication of this study is that bank supervisors should intensify its effort in addressing the nonperforming loans, capital adequacy problems issues in Nigeria. Also, bank supervisors should ensure that policies designed to improve the workings of the financial system are complied with.

Keywords: Bank Stability, Bank Performance, Bank behavior, financial stability, Nigeria, Bank Regulation

JEL Classification: G21, G28

Suggested Citation

Ozili, Peterson Kitakogelu, Determinants of Banking Stability in Nigeria (2019). CBN Bullion, Vol 43, No 2., 2019. Available at SSRN: https://ssrn.com/abstract=3392963

Peterson Kitakogelu Ozili (Contact Author)

University of Essex - Essex Business School ( email )

Wivenhoe Park
Colchester, CO4 3SQ
United Kingdom

Central Bank of Nigeria ( email )

Plot 33, Abubakar Tafawa Balewa Way
Central Business District, Cadastral Zone
Abuja
Nigeria

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