Effect of Selected Macroeconomic Variables on the Profitability of Deposit Money Banks in Nigeria: 2007-2018

ADIGA Dauda Leviticus¹, HARUNA Habila Abel^2, , YUA Henry³ and ADIGWE Patrick Kanayo⁴

¹Unity Bank Plc Wukari-Nigeria, Doctoral student Department of Banking & Finance, Nnamdi Azikiwe University Awka-Nigeria

²Department of Banking & Finance, Federal University Wukari-Nigeria

³Department of Banking & Finance, Nigerian Army College of Environmental Science & Technology, Makurdi-Nigeria

⁴Department of Banking & Finance, Nnamdi Azikiwe University Awka-Nigeria

Cite this paper:
ADIGA Dauda Leviticus, HARUNA Habila Abel, YUA Henry and ADIGWE Patrick Kanayo. Effect of Selected Macroeconomic Variables on the Profitability of Deposit Money Banks in Nigeria: 2007-2018. Journal of Finance and Economics. 2020; 8(4):152-160. doi: 10.12691/jfe-8-4-1

Abstract

This study examines the effect of selected macroeconomic variables on the profitability of deposit money banks in Nigeria. The study is based on the arbitrage pricing theory (APT) propounded by Ross (1976) and secondary data was used for the study. The hypotheses were tested using the OLS multiple regression analysis and results reveal that, Interest rate (H0₁) with B = -0.254, t = -0.237, p = .819; Exchange rate (H0₂) with B = -0.076, t = -2.093, p = .075 Gross domestic product (H0₃) with B = 0.643, t = 0.545, p = .602 and Inflation rate (H0₄) with B = 0.182, t = 0.343, p = .743 are not significant predictor of Net interest margin. The implication is that, the selected macroeconomic variables are not a significant predictor of deposit money bank profitability for the period of study.

Keywords:
macroeconomic variables profitability multiple regression deposit money banks

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