Impact of merger on bank characteristics: An empirical assessment of the lending behaviour of deposit money banks in Nigeria
Sadat Ibn Adam, Abubakar Sambo Junaidu, Micheal B Nwielaghi
The study empirically examined the impact of Merger on Bank Characteristics with specific interest on the Lending Behaviour of Deposit Money Banks in Nigeria. The study covered a period of 2006 to 2018 where a panel data was generated from the financial statements of the census banks over the study period. Multiple regression method was used in the form of Pooled Ordinary Least Square (OLS), Fixed Effect Model (FEM) and Random Effect Model (REM) to analyse the data with the aid of Stata statistical package. Diagnostic tests in the formof Hausman and Breusch Pagan Lagrange Multiplier Tests were conducted to select the best models.It was concluded that lending rate does not have significant impact on the lending behaviour of Deposit Money Banks (DMBs) in Nigeria. Similarly, Investment Portfolio was evidenced to have a significant impact on the lending activities of DMBs. Drawing from the findings of the paper, it was therefore recommended that Lending rate should not be too high because it makes the cost of borrowing more expensive for the borrower and it should not be too low because it will discourage banks from borrowing. In addition, Deposit Money Banks; as a growth strategy; should pay much attention to investible funds to enable them lend to the deficit economic units.
Sadat Ibn Adam, Abubakar Sambo Junaidu, Micheal B Nwielaghi. Impact of merger on bank characteristics: An empirical assessment of the lending behaviour of deposit money banks in Nigeria. International Journal of Commerce and Management Research, Volume 7, Issue 3, 2021, Pages 49-57