GREEN BANKING PRACTICES AND FINANCIAL PERFORMANCE OF QUOTED DEPOSIT MONEY BANKS IN NIGERIA

Abstract

Financial performance of banking industry globally including Nigeria is affected by several factors such as economic instability and financial crises. Evidence from literature confirmed that deposit money banks are faced with the threat of unstable financial performance especially in the developing countries across Africa, Asia and Latin America. Studies have shown that though a number of variables have been employed in different countries to improve financial performance of deposit money banks but only few have adopted green banking practices. This study therefore, examined the effect of green banking practices on financial performance (Return on Assets) of quoted deposit money banks in Nigeria. 

The study adopted an ex-post facto research design. The population consisted of 13 deposit money banks listed the Nigeria Exchange Group as 31st December, 2021. A sample of 11 deposit money banks with the relevant data were purposefully selected between 2012 and 2021. Data were obtained from published annual reports and financial statements. The reliability of the data was premised on the independent certification by statutory auditors. Descriptive and inferential (panel regression analysis) statistics were used to analyse the data at 0.05 level of significance.

The findings showed that green banking practices have significant effect on return on assets; (Adj.R2 = 0.09, W(5, 104) = 10.41, p < 0.05) of quoted deposit money banks in Nigeria. The study concluded that green banking practices improved financial performance of quoted deposit money banks in Nigeria.  It is therefore recommended that Central Bank of Nigeria should develop specific guidelines on green banking practices for the banking industry and motivate banks to adopt the practices and reporting as mainstream strategy. In addition, Management of Banks should intensify the integration of green banking practices into their operations in order to enhance improved sustainable financial performance