MACROECONOMIC VARIABLES AND PROFITABILITY OF LISTED DEPOSIT MONEY BANKS IN NIGERIA      

Abstract:
This paper investigates macroeconomic variables and profitability of listed Deposts Money Banks (DMBs) in Nigeria. The paper employed ex-post facto research design. Fully Modified Ordinary Least Square (FMOLS) model was used to investigate the relationship between macroeconomic variables and banks profitability. The population was 15 DMBs with a sample size focused on 10 leading listed DMBs on the Nigeria Stock Exchange for a period of 10-years (2009 – 2018). Data was obtained from the published abstract of statistics, statistical bulletin and published annual reports of the selected financial institutions, validated by certification of external auditors and Companies and Allied Matters Act (CAMA). The study adopted panel data analysis. The paper indicated that heterogeneous effects exist between macroeconomic variables and profitability of listed DMBs in Nigeria. The paper concluded that there exist negative significant effects of macroeconomic variables on profit before tax of listed deposit money banks in Nigeria. The paper therefore recommended that government and other regulatory bodies should put in place measures to ensure a decrease in negative effect of macroeconomic variables.
Keywords: Deposit Money Banks, Macroeconomic Variables, Monetary policy rate, Profit before Tax

Introduction
Banking is one of the utmost profitable and effective industry in every economy because of the features and special privileges the sector possesses which gives it high potentials for profitability. Granting loans and advances to individuals is one of their major functions that equally assist them in their business. From previous challenges and reviews carried out, it has been the primary concern of investors, shareholders and lenders as well as managers in planning their programmes or future activities for greater efficiency and benefits thus; it is impossible to overlook the effect of macroeconomic variables on banks profitability.
Globally, profitability within the banking sector has been extensively researched especially in developed countries like North America and Europe as Profitability and stability in monetary establishments are continuously a growing concern for regulators and bank supervisors. This problem gained important attention among the researchers after the 2007/2008 monetary crisis. (Adusei, 2015).
In Africa, Nigeria is the largest economy with regard to Gross Domestic Product (GDP) and second to South Africa. Since 2003, GDP has averaged 6 to 7 percent. GDP per capita has geared up from below $700 in 2004 to $1,418 in December 2009 showing economic progress. Notwithstanding, wealth distribution is heavily lopsided with 54 percent of the whole population classified as featured below the poverty level (CBN Annual Report, 2013).