Corporate Governance and Financial Distress in the Banking Industry: Nigerian Experience

John, Ayoola Tajudeen; Ogechukwu, Obokoh Lawrence

doi:10.22610/jebs.v10i1.2101

Cited by 7 publications

(8 citation statements)

References 47 publications

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“…According to [32], the greater the managerial ownership will be to unite shareholder's and manager's interests to reduce economic pain. This study's results are in line with previous research conducted by [33], which states that Managerial has a negative and significant effect on Financial Distress.…”

Section: Discussionsupporting

confidence: 92%

Financial Distress of Registered Banking in Indonesia STOCK Exchange: Review of the Good Corporate Governance Aspect and Banking Performance

Kurniasih

2021

EJBMR

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This study aims to analyse the effect of good corporate governance (GCG) mechanisms and financial performance on the Financial Distress of banks listed on the Indonesia Stock Exchange. What utilized a quantitative approach to collect the data. And the causal research design is used to examine the influences. The research population was 45 banks which are listed on the Indonesia Stock Exchange in 2019. The sample of this research was 15 banks that met the sampling criteria by purposive sampling. The results showed that Institutional, Managerial, Independent Commissioner Board Composition, Audit Committee, CAR, and LDR significantly affected financial distress. The Non-Performing Loan (NPL) has a positive and significant impact on economic desperation.

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Section: Discussionsupporting

confidence: 92%

Financial Distress of Registered Banking in Indonesia STOCK Exchange: Review of the Good Corporate Governance Aspect and Banking Performance

Kurniasih

2021

EJBMR

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“…The QR method is estimated for the quantiles 0.25, 0.50, 0.75. We use QR to estimate models (9) and (10), developed by (Powell, 2019), to take into account the panel structure of our data (John & Ogechukwu, 2018; Mazioud Chaabouni, Zouaoui, & Ellouz, 2018). The random effects estimator and GMM regressions are performed to verify the robustness of the QR results.…”

Section: Methodsmentioning

confidence: 99%

Does market power explain margins in dual banking? Evidence from panel quantile regression

2021

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This paper examines whether banks with greater market power have more control over the net interest margin. To this end, we employ panel quantile regression (QR) to a sample of Islamic and conventional banks from 14 dual banking countries during 2005-2018. Our empirical findings show that greater market power in a dual banking system results in a higher net interest margin, which is in line with the mainstream theory of monopolistic competition. After introducing the Islamic interaction dummy in the model, we find that in the case of Islamic banks the result is significant only for higher quantiles of bank margins. This study also has some policy implications, namely that the concentration of market power can be countered by developing a competitive environment among the banks to have competitive bank margins. We further suggest that to get a higher profit margin, Islamic banks need to be more competitive and more efficient while deciding the profit margins.

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“…To buttress this, John and Ogechukwu (2018) noted that “today, the very integrity and survivability of the functions of banks have deteriorated given incessant frauds and accounting scandals.” Fraud is a widespread issue (Idolor, 2010; Ishola et al , 2021; Okodugha, 2021) that is not specific to the financial sector, or even peculiar to a country. Many organizations have turned to develop ethical guidelines and codes of ethics in an effort to improve their reputation in light of the demise of significant multinational corporations like Enron (in the USA), as well as high-level allegations and actual examples of corporate fraud.…”

Section: Literature Reviewmentioning

confidence: 99%

Amoral behavior, control climate, job insecurity and fraudulent intentions among bank employees

Ametepe

Banwo²,

Arilesere³

2022

IJOES

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Purpose Combating and detecting fraud is a daunting task, especially in the Nigerian banking sector, because it necessitates a thorough understanding of the nature of fraud, as well as how it can be performed and concealed by fraudsters. Therefore, the purpose of this study is to empirically examine the relationship and the predictive ability between amoral behavior, control climate and perceived job insecurity on fraudulent intentions among bank employees in Lagos Metropolis. Design/methodology/approach Descriptive and cross-sectional designs were used to select employees from 12 banks using predetermined scales. In total, 1,080 questionnaires were distributed, but 950 were retrieved and analyzed. The study used multistage sampling by applying cluster, purposive and simple random sampling techniques. Correlation and hierarchical regression analyses were used to analyze the data. Findings A significant positive relationship and predictive abilities were established between employee’s amoral behavior and fraudulent intentions on the one hand, and employee’s job insecurity and fraudulent intention on the other, going by the additional variance identified when each variable was added in each step, implying that employees who exhibit amoral behavior are likely to engage in fraudulent intentions. In the same manner, employees who feel insecure are likely to engage in fraudulent acts because they would want to secure their future. However, there was a significant negative relationship and predictive ability between control climate and fraudulent intention; implying that inculcating a strict control climate minimizes or totally eradicates employees’ intentions to commit fraud. Research limitations/implications This paper is limited to amoral behavior, control climate, perceived job insecurity and fraudulent intentions; it is limited to employees in the banking sector, with a special focus on emerging economies, Nigeria, West Africa. The implication of this is that the result may not be generalized to other sectors and other countries. Practical implications The practical implication of the study is that managers should be aware that employees who are in danger of losing their jobs are more likely to engage in the fraudulent act, and this should be looked into. Training and retraining, workshops, conferences and seminars on employee morale behaviors as well as strict adherence to ethical codes of conduct are vital to enlighten the employees on the dangers of perpetrating fraud and the impact on themselves and the economy at large. Control climate is a very vital tool in curtailing the incidences of fraud in the organization. Originality/value This paper contributes to the knowledge by filling the gaps left by a lack of empirical examination into the combined influence of amoral behavior, control climate and perceived job insecurity on fraudulent intentions, especially among bankers in Lagos Metropolis. It provides management with guides on how to drastically reduce the menace of fraudulent intentions in the banking sector and by extension in other non-banking organizations.

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Corporate Governance and Financial Distress in the Banking Industry: Nigerian Experience

Cited by 7 publications

References 47 publications

Financial Distress of Registered Banking in Indonesia STOCK Exchange: Review of the Good Corporate Governance Aspect and Banking Performance

Financial Distress of Registered Banking in Indonesia STOCK Exchange: Review of the Good Corporate Governance Aspect and Banking Performance

Does market power explain margins in dual banking? Evidence from panel quantile regression

Amoral behavior, control climate, job insecurity and fraudulent intentions among bank employees

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