EconPapers    
Economics at your fingertips  
 

CONSOLIDATION WITHIN THE BANKING SECTOR AND SAVINGS DEPOSITS: EFFECTS ON LIQUIDITY, OUTPUT, AND PROFITABILITY WITHIN THE NIGERIAN ECONOMY

Oghenovo Adewale Obrimah () and Chidinma Edith Ebere
Additional contact information
Oghenovo Adewale Obrimah: Babcock University, Ilishan Remo Ogun State Nigeria, ILISHAN REMO, Nigeria
Chidinma Edith Ebere: Babcock University, Ilishan Remo Ogun State Nigeria, ILISHAN REMO, Nigeria

Annals of Financial Economics (AFE), 2015, vol. 10, issue 01, 1-29

Abstract: In this study, we find savings deposits have contributed significantly to the effectiveness of regulation induced consolidation within the banking sector in so far as improvements in banking system structure, output, profitability and competitiveness are concerned. Specifically, we find savings deposits are key parameters in the transition from a banking structure within which profitability is primarily determined by liquidity during the pre-consolidation period (2007–2008) to a banking structure within which profitability is primarily a function of loan portfolio growth (output) during the post-consolidation period (2010–2012). In spite of the increase in importance of savings deposits for banking system competition, output, or profitability during the post-consolidation period, savings deposit rates have decreased by about 50% between the pre- and post-consolidation periods. Interest rates on savings deposits also do not lie on the efficiency frontier for loan production. Combined, our findings indicate the benefits of consolidation that accrue from savings deposits have yet to translate into social welfare benefits for banks' retail customers.

Keywords: Consolidation; mergers; acquisitions; regulation; savings; deposits; loans; competition; banks; structure; G1; G2 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed

Downloads: (external link)
http://www.worldscientific.com/doi/abs/10.1142/S2010495215500013
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wsi:afexxx:v:10:y:2015:i:01:n:s2010495215500013

Ordering information: This journal article can be ordered from

Access Statistics for this article

Annals of Financial Economics (AFE) is currently edited by Michael McAleer

More articles in Annals of Financial Economics (AFE) from World Scientific Publishing Co. Pte. Ltd.
Series data maintained by Tai Tone Lim ().

 
Page updated 2017-12-16
Handle: RePEc:wsi:afexxx:v:10:y:2015:i:01:n:s2010495215500013