Citation:

Olatubosun Felix JOLAIYA. "Effect of Non-Interest Income on the Financial Performance of Deposit Money Banks in Nigeria" International Research Journal of Economics and Management Studies, Vol. 2, No. 4, pp. 638-645, 2023.

Abstract:

The study investigated the effect of non-interest income on the financial performance of selected deposit money banks in Nigeria. The study adopted ex post facto research and employed the panel least squares (PLS) regression technique to analyze the data (using descriptive test, correlation test and regression estimation). The major findings of the study indicated that income from electronic transfer charges was positive and significant on the return on assets (financial performance) of selected deposit money banks in Nigeria. Also, the income from card maintenance and stamp duty collections was indicated to be positive and significant on the return on assets of selected deposit money banks in Nigeria. Furthermore, the study found the income from commissions and value-added tax collections to be positive and significant on the bank's return on assets. Based on the results from the analytical tests carried out, the researchers concluded that non-interest income has a significant positive effect on the performance of deposit money banks (DMBs) in Nigeria. Following the empirical results and the findings, the study recommended that the banks should implement a coordinated scheme that will boost income electronic transfer transactions; this will further expand the non-interest income of the bank; the banks should expand its other operations that generate commission and charges on stamp duty collections, this will increase the contribution the component to the total noninterest income of the bank and their overall performance; also the banks should leverage the growing size of its electronic operations by customers to further boost its non-interest income and financial performance.

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Keywords:

Non-Interest Income, Deposit Money Banks, Panel Regression Technique.