AN ASSESSMENT OF THE LEVEL OF INVESTMENT EFFICIENCY IN NIGERIAN DEPOSIT MONEY BANKS: AN EMPIRICAL ANALYSIS

This study assesses the level and differences in investment efficiency (IE) among Nigerian Deposit Money Banks (NDMBs), examining gaps in previous studies that have emphasized IE determinants while giving limited attention to cross-bank disparities within developing financial systems. It is empirically evident that how Nigerian banks allocate financial resources, considering their performance and size differences, is somewhat imperfect and inconclusive, regardless of the adoption of International Financial Reporting Standards (IFRS) and regulatory reforms. The study adopts an ex-post facto research design, uses secondary data sources, and data were obtained from the audited annual reports of purposively selected ten (10) NDMBs listed on the Nigerian Exchange Group (NGX) from 2012 to 2021. Net cash flow from financing activities is used as a proxy for IE, leverage, return on assets, firm size, and age, which are used as control variables. Descriptive statistics are used to assess the trend and variations in IE. The findings show an average of (0.003814) for IE, which implies that, on average, the sampled banks were effectively making use of their investment resources. However, the standard deviation (0.064688) was relatively high, indicating that there is a wide variation in IE among the banks, indicating that some banks are reporting higher IE, while some are reporting lower efficiency. The findings further reveal that IE does not reliably translate into asset growth, revealing managerial and structural disparities within the NDMBs. The study concludes that there are differences in the level of IE among NDMBs.