BANK SPECIFIC, INDUSTRY SPECIFIC AND MACROECONOMIC DETERMINANTS OF BANK PROFITABILITY IN NIGERIA

This study investigates the impact of bank-specific, industry-specific and macroeconomic indicators on bank profitability in Nigeria over the time period from 1998 to 2012, using random-effect model. Bank profitability is proxied by return on assets (ROA) return on equity (ROE) and net interest margin (NIM). Findings suggest the existence of positive and significant effect of capital adequacy, bank size, productivity growth and deposits on profitability. Credit risk and liquidity ratio have a negative and significant effect on bank profits. However, no evidence is found in support of the effect of industry-specific variables. Finally, as expected, inflation rate and interest rate are negatively and significantly related to bank profitability