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Regulatory non-compliance and performance of deposit money banks in Nigeria

Ismaila Yusuf (Department of Accounting, Federal University Dutsin-Ma, Dutsin-Ma, Nigeria)
Damola Ekundayo (Department of Accounting, Federal University Dutsin-Ma, Dutsin-Ma, Nigeria)

Journal of Financial Regulation and Compliance

ISSN: 1358-1988

Article publication date: 9 July 2018

319

Abstract

Purpose

The purpose of this study is to examine regulatory sanctions from an emerging economy perspective and analyzing the impact of regulators imposed monetary sanctions on banks’ performance.

Design/methodology/approach

The study adopted correlational research design to examine the effect of regulatory penalties on the performance of deposit money banks in Nigeria. This study used panel data from a sample of 15 deposit money banks in Nigeria for the period of 2006-2015. Multiple regression analysis was carried out.

Findings

Results showed that penalties imposed by regulators in the Nigerian banking industry have no significant impact on the bottom line of the defaulters. Penalties imposed on foreign exchange and international trade related infraction showed that the cost of penalties is below the benefits enjoyed from such infractions.

Practical implications

The insignificant impact of penalties on performance implies that deposit money banks have considered penalties imposed by regulators as operational expenses and transferred such to customers.

Originality/value

The study differs from other studies that examined regulatory penalties on performance by focusing on financial performance and using data from an emerging economy perceived to have weak regulatory environment.

Keywords

Citation

Yusuf, I. and Ekundayo, D. (2018), "Regulatory non-compliance and performance of deposit money banks in Nigeria", Journal of Financial Regulation and Compliance, Vol. 26 No. 3, pp. 425-441. https://doi.org/10.1108/JFRC-04-2017-0041

Publisher

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Emerald Publishing Limited

Copyright © 2018, Emerald Publishing Limited

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