Treasury Single Account (TSA) Implementation and Financial Performance of Commercial Banks in Nigeria

This work examined the effect of Treasury Single Account (TSA) implementation on the financial performance of commercial banks in Nigeria. The study employed expo-facto survey research design and seven big commercial banks in Nigeria. First Bank of Nigeria, Zenith Bank, Access Bank, UBA, Union Bank, Diamond Bank and Fidelity Bank were judgmentally sampled for this study. Secondary data were gathered through CBN statistical bulletin from 2013 to 2017 (that is two years before and two years after implementation of TSA). Customers deposit was used as proxy for independent variable (Treasury Single Account), while profit after tax, return on equity and return on assets are proxies for dependent variable (financial performance). The data collected were analyzed using comparable mean, while research hypotheses were tested using Simple regression analysis. The findings obtained from the statistical testing of the hypotheses of this study show that customers’ deposit has a significant effect on profit after tax, return on assets and return on equity of commercial banks in Nigeria. The study recommends that Government should create enabling grounds for commercial banks to operate and be profitable to enable investors to have confidence on the economy because banks drive every economy. Commercial banks should increase their customer deposit by engaging in aggressive marketing strategy that will attract private individuals and businesses in order to increase the volume of their liquidity. Merger and acquisition should be encouraged in order to increase the capital base of banks and to make them strong and viable. Also, banks should avoid over-reliance on government deposits and focus more on other banking activities as well as investments that would help in enhancing their performance.