Financial Intermediation in the Pre-Consolidated Banking Sector in Nigeria

This paper uses unique bank-by-bank balance sheet and income statement information to investigate the intermediation efficiency in the Nigerian pre-consolidated banking sector during 2000-05. The author analyzes whether the Central Bank of Nigeria's policy of recent banking consolidation can be justified and rationalized by looking at the determinants of spreads. A spread decomposition and panel estimations show that the reform of the banking sector could be the first step to raise the intermediation efficiency of the Nigerian banking sector. The author finds that larger banks have enjoyed lower overhead costs, increased concentration in the banking sector has not been detrimental to the spreads, both increased holdings of liquidity and capital might have led to lower spreads in 2005, and a stable macroeconomic environment is conducive to a more efficient channeling of savings to productive investments.

Bibliographic Details

Main Author:	Hesse, Heiko
Language:	English
Published:	World Bank, Washington, DC 2007-06
Subjects:	ACCOUNTING, ARBITRAGE, AUCTIONS, BAD DEBT, BAD DEBTS, BALANCE SHEET, BALANCE SHEETS, BANK ASSETS, BANKING CONCENTRATION, BANKING CRISIS, BANKING INDUSTRY, BANKING LEGISLATION, BANKING REGULATION, BANKING SECTOR, BANKING SUPERVISION, BANKING SYSTEM, BANKING SYSTEMS, BANKS, BENCHMARKS, CAPITAL MARKETS, CAPITAL REQUIREMENTS, CENTRAL BANK, COMMERCIAL BANKS, COMPETITIVENESS, CONSOLIDATION, CORRELATION ANALYSIS, COUNTRY COMPARISONS, DEPOSIT INSURANCE, DEPOSITORS, DEPOSITS, DEREGULATION, DEVALUATION, DISINTERMEDIATION, EARNING ASSETS, ECONOMIES OF SCALE, EXCESS LIQUIDITY, EXCHANGE RATES, FINANCIAL DEREGULATION, FINANCIAL DISINTERMEDIATION, FINANCIAL INDICATORS, FINANCIAL INSTITUTIONS, FINANCIAL INTERMEDIATION, FINANCIAL LIBERALIZATION, FINANCIAL REGULATION, FINANCIAL SECTOR, FINANCIAL SECTOR REFORM, FOREIGN BANKS, FOREIGN EXCHANGE, GDP, GROWTH RATE, GUIDELINES, INCOME STATEMENTS, INFLATION, INFLATION RATE, INFLATION RATES, INTEREST INCOME, INTEREST RATE, INTEREST RATES, INVESTMENT BANKS, LATIN AMERICAN, LEGAL SYSTEMS, LIQUID ASSETS, LOAN LOSS PROVISIONS, LOAN MARKETS, MARGINAL COST, MARGINAL COSTS, MERGERS, MORTGAGES, NATIONALIZATION, OPERATING INCOME, OPPORTUNITY COSTS, OVERHEAD COSTS, OVERVALUATION, PARENT COMPANY, POLITICAL ECONOMY, PORTFOLIO, PORTFOLIO QUALITY, PRIVATIZATION, PROFIT MARGIN, PROFIT MARGINS, PROPERTY OWNERSHIP, RESERVE REQUIREMENT, RESERVE REQUIREMENTS, SAVINGS, SCALE EFFECTS, SPECIALIZED INVESTMENT, STATE ENTERPRISES, STATEMENT, STRUCTURAL ADJUSTMENT, TAX PAYMENTS, TAX RATE, TOTAL REVENUE, TRADE LIBERALIZATION, TRANSACTION COSTS, TREASURY BILL, VOLATILITY,
Online Access:	http://documents.worldbank.org/curated/en/2007/06/7745720/financial-intermediation-pre-consolidated-banking-sector-nigeria https://hdl.handle.net/10986/7446
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