The financial condition of Nigerian banks: an evaluation

This paper aims to evaluate the potency of bank financial condition descriptors in Nigeria, developed in a previous paper [Njoku and Inanga, (2010), Part 1]. The earlier study had determined that market power, deposit mobilisation, capital confidence and market presence shaped the discriminant model of bank financial condition. Market power and deposit mobilisation suggests the operating dynamics enabling banks to exploit current opportunities in the market place and are facilitated by market presence in the longer-term. Bank operating exploits are defended by the confidence that capital transmits in the longer term. These descriptors suggest two stages in bank health developmental process. First, bank market power and deposit mobilisation operations in the short run, facilitated by market presence in the long run, underscore the attacking dynamics that differentiate strong, normal and weak banks. Second, capital provides the defence needed to maintain confidence in the longer term to further differentiate the banks.