AFRAG010

Interest Rate and Profitability of Commercial Banks in Nigeria

Lawal, Suleiman Gbenga Department of Banking and Finance, Faculty of Management Sciences, University of Calabar. P.M.B. 1115 Calabar, Cross River State. Nigeria gbengalawal24@yahoo.com

Nkamare, Stephen Ekpo Department of Banking & Finance, Faculty of Management Sciences, University of Calabar,

Calabar, Cross River State – Nigeria ORCID: 0000-0003-4514-8546

Abstract

The study empirically examined interest rate and profitability of commercial banks in Nigeria the effect of interest rate on performance of commercial banks in Nigeria. The following objectives were determined; to examine the effect of deposit interest rate on the performance of commercial banks in Nigeria, to establish the relationship between lending interest rate and performance of commercial banks in Nigeria; to ascertain the effect of bank credit on the performance of commercial banks in Nigeria. Secondary source of data was employed through central banks statistical bulletin. Ordinary least square of multiple regression technique was  used  to establish      the      relationship      between dependent and independent variables. The findings revealed that deposit, interest rate, lending interest rate and bank credit had a positive impact on banks profitability. The study recommended that banks improve their profitability through charging moderate lending rates and manage their portfolios to protect the long run interest of profit making.

Keywords: Interest rate, deposit interest rate, lending interest rate, bank credit, profitability.