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Market Share and Profitability Relationship: A Study of the Banking Sector in Nigeria

Author

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  • Lyndon M Etale
  • Paymaster F Bingilar
  • Meshack S Ifurueze

Abstract

This study examined the relationship between market share and profitability of the banking sector in Nigeria. The study involved ten banks listed on the Nigerian Stock Exchange (NSE). Secondary data was collected from the NSE covering a period of nine years from 2003 to 2011. The multiple regression analysis was used to test the hypotheses. The dependent variable in the regression model is profitability represented by profit after tax (PAT), while the independent variables are two components of market share for banks: deposit customers (DC) and loan customers (LC). The results of the study revealed that market share represented here by deposit customers (DC) and loan customers (LC) have positive relationship with profitability (PAT) of the banking sector in Nigeria. The researchers recommended that management of banks in Nigeria should entreat quality of management as an important part of market share effect because superior management causes banks to operate at a higher level of effectiveness and efficiency in managing the deposit portfolio and loan volume which in turn will boost profitability.

Suggested Citation

  • Lyndon M Etale & Paymaster F Bingilar & Meshack S Ifurueze, 2016. "Market Share and Profitability Relationship: A Study of the Banking Sector in Nigeria," International Journal of Business, Economics and Management, Conscientia Beam, vol. 3(8), pages 103-112.
    • Handle: RePEc:pkp:ijobem:v:3:y:2016:i:8:p:103-112:id:1162
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    Cited by:

    1. Soonduck Yoo & Jong-Sun Park, 2019. "The Influence of Information Acceptance on Information Use Performance in the Case of Vulnerable Classes," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 11(5), pages 474-486, August.
    2. Omonijo & O.S . & Egwakhe & A.J . & Akande & F.P . & Umukoro & E.J, 2022. "Corporate Entrepreneurship and Market Share of Selected Polyurethane Manufacturing Companies in Lagos State, Nigeria," International Journal of Finance, Insurance and Risk Management, International Journal of Finance, Insurance and Risk Management, vol. 12(2), pages 169-181.
    3. Omonijo & O.S. & Egwakhe & A.J . & Akande & F.P. & Umukoro & E.J, 2022. "Corporate Entrepreneurship and Market Share of Selected Polyurethane Manufacturing Companies in Lagos State, Nigeria," International Journal of Finance, Insurance and Risk Management, International Journal of Finance, Insurance and Risk Management, vol. 12(2), pages 183-195.
    4. Emmanuel Dele Omopariola & Abimbola Windapo & David John Edwards & Hatem El-Gohary, 2021. "Level of Financial Performance of Selected Construction Companies in South Africa," JRFM, MDPI, vol. 14(11), pages 1-18, October.
    5. Nikolic, Marijana & Krajisnik, Milenko, 2019. "Impact Of International Country Rankings On Economic Development Of European Countries In Transition," UTMS Journal of Economics, University of Tourism and Management, Skopje, Macedonia, vol. 10(2), pages 259-273.

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