MONETARY POLICY AND COMMERCIAL BANKS PERFORMANCE: EVIDENCE FROM NIGERIAN BANKING SECTOR

The study investigates the impact of monetary policy on the performance of the Nigerian banking sector from 1980 to 2023. To achieve the study objective of evaluating the impact of monetary policy instruments on the performance of the Nigeria commercial banks time series data were collected from the publications of Central Bank of Nigeria (CBN), International Monetary Fund (IMF); and subjected to post estimation for unit root. Monetary policy instruments have been a veritable tool for economic management. Vector Auto regression (VAR) and Autoregressive Distributed Lag techniques (ARDL) were adopted as the method of analysis. Our findings show that various monetary policy instruments notably monetary policy rate, money supply growth and treasury bill rate were instrumental in driving the profit and Loans performance of commercial banks in Nigeria in the study period. Specifically, a shock to commercial banks profit by monetary policy rate, money supply growth and Treasury bill rate produced positive impact on commercial banks profit that are statistically significant at various levels of significance throughout the period after a time lag.  Our findings also shows that monetary policy instruments were however slower in Domestic savings mobilization drive in the banking system. To deepen commercial banks performance in Nigeria further, we recommend policies that will make income to the people inclusive to boost domestic savings and a lagged-effect consideration in the administration of monetary policy in Nigeria.