THE IMPACT OF MACROECONOMIC VARIABLES ON BANK PERFORMANCE IN NIGERIA

In this paper, we examine the macroeconomic determinants of bank performance in Nigeria. Our results reveal that economic growth, trade and interest rate stand out as the important macroeconomic predictors of bank performance in Nigeria. We find that growth and trade promote bank performance as against high interest rate which impedes bank performance. The main take away from this study is that growth, trade and interest rate are important determinants of bank performance in Nigeria. These results have direct policy implications. First, to unlock superior performance in the banking sector, government needs to continually favour policies that improve growth and foster trade. Second, incessant increases in interest rates need be minimized; increases in rates should be restricted only to instances where tighter monetary policy is indeed optimal.