Impact of Political Affiliation on Bank Profitability in Nigeria
The importance of bank profitability can be appraised at the micro and macro levels of the economy. At the micro level, profit is the essential prerequisite of a competitive banking institution and the cheapest source of funds. It is not merely a result, but also a necessity for successful banking in a period of growing competition on financial markets. Hence, the basic aim of a bank’s management is to achieve a profit, as the essential requirement for conducting any business. At the macro level, a sound and profitable banking sector is better able to withstand negative shocks and contribute to the stability of the financial system. The importance of bank profitability at both the micro and macro levels has made researchers, academics, bank managements and bank regulatory authorities to develop considerable interest on the factors that determine bank profitability. The broad aim of this paper is to analyze, on the basis of empirical evidence, the relationship between political affiliation and bank profitability in Nigeria.
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