NON-INTEREST INCOME AND THE PERFORMANCE OF SELECTED COMMERCIAL BANKS LISTED IN NIGERIA
Keywords:
Fee income, Non-Interest Income, Performance,, Return on Assets, Trading & Investment IncomeAbstract
The study focused on the effect of non-interest income on the performance of selected commercial banks listed in Nigeria. Specifically, the study ascertains the relationship between Fee income, Trading and Investment Income (TII) and the Return on Assets of selected commercial banks. A total of 7 public listed commercial banks licensed to operate internationally, was sampled over a period of 12 years ranging from 2012-2023. Data were descriptively and inferentially analysed using the Pearson Correlation Coefficient (PCC). The findings revealed that Fee income has a negative but non-significant relationship with Return on Assets of commercial banks in Nigeria (r = -0.204661; p-value = 0.0742). It was discovered that Trading and Investment Income has a positive but non-significant relationship with Return on Assets of commercial banks in Nigeria (r = 0.211513; p-value = 0.0648). The study therefore concluded that while some components of non-interest income significantly contribute to financial performance, others exhibit no substantial impact. This disparity underscores the nuanced and often unpredictable relationship between diversified income streams and profitability, which is shaped by market conditions, operational efficiency, and regulatory frameworks in the Nigerian banking sector. It was recommended that product development and marketing Teams of Commercial Banks should conduct a comprehensive review of the bank's fee-based services to identify and eliminate charges that may deter customer transactions or reduce client satisfaction. Focus on developing transparent, value-adding fee structures that are competitive and customer-centric to enhance transaction volume and improve their overall contribution to asset returns.
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