DETERMINANTS OF BANK PERFORMANCE IN NIGERIA: THE DYNAMICS OF INTERNALITY AND EXTERNALITY MEASURES

This paper investigated internality and externality dynamics as determinants of bank performance in Nigeria. Towards achieving this, the paper applies quantitative estimation by means of panel data. The data analyzed were performance measures (return on equity and net interest margin), internal (loans and advances and long-term investment) and external (gross domestic product and inflation) factors. Data over the period 2006-2016, were obtained from the annual reports and accounts of banks and Central Bank of Nigeria statistical bulletin. Findings were based on the results of the Ordinary Least Square and Canonical Correlation. Findings showed that internality and externality dynamics are the determinants of bank performance among Nigerian banks except inflation rate. Also, we found that internality dynamics are the most significant factors that determine bank performance especially loans and advances. It was recommended that banks should employ efficient and effective loan recovery schemes so as to enhance performance so that they do not become insolvent.