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| The Effect of Accounting Information on Lending Decision of Quoted Deposit Money Banks in Nigeria |
Egolum, Priscilla Uche. Ph.D and Eze Maria Nwankwoeke
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Abstract:
This study investigated the effect of Accounting Information (earnings per share and return on equity) on lending decision (measured by non-performing loan) of quoted deposit money banks in Nigeria from 2008 to 2017, using Simple Linear Regression. The R-squared coefficient of determination was adopted to show the degree of variation of non-performing loan that is explained by the explanatory variable. Also, the T-Statistic and F-Statistic were adopted to show the degree at which the independent variable affects the dependent variable. This study selected 15 deposit money banks for the study period. The regression analysis reveals that individual regression of the proxies for Accounting Information which is Earnings per Share and Return on Equity have positive and statistical significant effect on non-performing loan at 5% level of significant respectively. The study conclude that banks should adopt ethical standards in the preparation and presentation of their accounting information in order to increase their accounting earnings. The study also recommends that CBN and other regulatory bodies should strengthen supervision of banks to prevent a sharp buildup of NPLs in the future.
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