Regulatory non-compliance and performance of deposit money banks in Nigeria
Journal of Financial Regulation and Compliance
ISSN: 1358-1988
Article publication date: 9 July 2018
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
:Emerald Publishing Limited
Copyright © 2018, Emerald Publishing Limited