FINANCIAL LIBERALIZATION AND BANKING SECTOR PERFORMANCE IN NIGERIA

Abstract

This study investigates the impact of financial liberalization on bank performance in Nigeria employing time series quarterly data spanning 1981-2012 using the ordinary least square (OLS) technique. The empirical result revealed that liberalized variables significantly impacted the performance of banks through increase banks profit. The results specifically reveal that liberalization of the variables of interest which are interest rate and lending rate enhances bank performances. The study then concluded that financial liberalization significantly and positively affects bank performance in Nigeria. In view of this, it was recommended among others that the government should pursue and sustain the policies of financial liberalization in order to enhance the competitiveness and efficiency of the Nigeria banking sector through appropriate institutional framework.