A Post-Consolidation Assessment of Profitability in Nigerian Banks
Abstract
Using stochastic frontier technique, this study examined the changes in the profit efficiency of Nigerian banks after the recapitalization exercise of central bank of Nigeria for the period 2006 to 2008. The results showed that the estimated profit efficiency scores for 2006, 2007 and 2008 for troubled banks were 0.79, 0.89 and 0.94, respectively while corresponding values for healthy banks were 0.47, 0.66 and 0.81. Average efficiency score of all sampled banks were 0.59, 0.75 and 0.86 for 2006, 2007 and 2008, respectively. The finding implies that profitability is not a good measure of performance.Downloads
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