Effect of Employee Cost on the Financial Performance of Commercial Banks in Nigeria

1 Nmesirionye, Josephine Adanma, 2 Okezie Stella Ogechukwu & 3 Eshiet Udeme Enobong
Department of Accounting, Micheal Okpara University of Agriculture Umudike
1 adandynmes@yahoo.co.uk , 2 nwanekem@gmail.com, 3 udemeeshiet@aksu.edu.ng

The study examined the effect of employee cost on the financial performance of listed commercial
Banks in Nigeria. To achieve the objective of the study, ex-post factor research design was
adopted. The study population is made up of fifteen (15) commercial banks listed on Nigeria stock
exchange as at April 2021 out of which ten (10) banks were selected. Secondary data sourced from
the annual reports and accounts of the selected banks were employed in the study. Data was
analysed using descriptive statistics and ordinary least squares regression technique. Findings
from the study reveal that employee cost has a positive and significant effect on the profit after tax
of listed commercial banks in Nigeria. Hence the study concludes that employee cost has
significant effect on financial performance of listed commercial banks in Nigeria. The study
recommends amongst other things that commercial banks need to recognize that cost expended on
employees are investments that will yield future returns if not in the short run then over the long
run both for the employee and for the wellbeing of the bank.
Keywords: Commercial banks, Profit after tax, Employee cost, Human capital, Performance

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