The Role of Deposit Growth in The Productivity of Deposit Money Banks in Nigeria: Case Study of Union and Wema Banks in Lagos State

Aliu Oguntade Fatai and Raymond Alenoghena
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Aliu Oguntade Fatai: Department of Management Sciences, Trinity University, Yaba, Lagos

International Journal of Research and Scientific Innovation, 2024, vol. 10, issue 12, 234-246

Abstract: The ability of deposit money banks (DMBS) to achieve steady growth on their deposit base is a significant performance indicator to assess the efficiency and effectiveness of these banks. There has been a steady decline in banks’ deposit base, signalling performance deterioration, attributed to poor service rendering, high non-performing loans, increasing cost of operations and high staff attritions. This study examined the importance of deposit-based growth of two DMBs in Lagos State and their efforts to mobilise cheap deposits to increase their interest revenues and ultimately enhance their profitability. An aggressive deposit mobilisation drive is one policy option for these DMBs to motivate their staff to deliver superior performances. A survey research design was employed, and five hundred copies of research instruments were administered to the staff of the two banks. SPSS was adopted to process the The data weressed using SPSS, and the results showed that deposit growth positively and significantly affects overall organisational productivity. The multiple regression analysis results showed that fixed deposits (B = 0.099, p = 0.013) and recurring deposits (B = 0.159, p = 0.000) have a positive and significant effect on productivity at the selected deposit money banks. The study concluded that giving attractive incentives to the organisation’s staff of all categories will improve productivity. The study emphasised that extra efforts should be placed on rendering excellent service, which would significantly improve and sustain deposit mobilisation and organisational productivity. Also, the study recommends that attractive remunerations should be implemented for staff in line with the changing dynamics of the environment to their performance in meeting the bank’s deposit target responsibilities.

Date: 2024
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