Non-Interest Income and Deposit Money Banks (DMBs) Performance in Nigeria

Lateef Adewale Yunusa, Kareem Abidemi Arikewuyo, Olusola Enitan Olowofela, Wasiu Abiodun Sanyaolu


The review of the regulations guiding the activities of Deposit Money Banks (DMBs) in Nigeria affected the revenue generated by DMBs, forcing most banks to diversify their sources of revenue to non-interest income. Panel data technique was employed to examine the impact of non-interest income on DMBs performance in Nigeria from 2012 through 2019. The empirical finding revealed that noninterest income, capital adequacy ratio, and bank loan positively and significantly impact DMBs’ performance in Nigeria. The study recommends that DMBs delve into non-interest income activities as it appeared to improve the performance of DMBs in Nigeria, and the monetary authority should review the policy guiding the non-interest income activities of the DMBs at regular intervals.

How to Cite:
Yunusa, L. A., Arikewuyo, K. A., Olowofela, E. O. & Sanyaolu, W. A. (2022). Non-Interest Income and Deposit Money Banks (DMBs) Performance in Nigeria. Signifikan: Jurnal Ilmu Ekonomi, 11(1), 31-42.


non-interest income; return on asset; panel regression; bank performance

Full Text:



Allen, F., & Santomero, A. M. (2001). What Do Financial Intermediaries Do?. Journal of Banking & Finance, 25(2), 271-294. 4266(99)00129-6.

Al-Slehat, Z. A. F., & Altameemi, A. F. (2021). The Relationship Between Non-Interest Revenue and Sustainable Growth Rate: A Case Study of Commercial Banks in

Jordan. The Journal of Asian Finance, Economics, and Business, 8(5), 99-108.

Al-Tarawneh, A., Abu Khalaf1, B.K. & Al Assaf1, G. (2017). Noninterest Income and Financial Performance at Jordanian Banks. International Journal of Financial Research, 8(1), 166-171.

Athanasoglou, P. P., Brissimis, S.N. & Delis, M. D. (2008). Bank-specific, Industry-specific and Macroeconomic Determinants of Bank Profitability. Journal of International and

Financial Markets, Institutions and Money, 18(2), 121-136. 07.001.

Baek, S., Lee, K. Y., Lee, J. W. & Mohanty, S. (2018). Diversification in Korean Banking Business: Is Non-Interest Income a Financial Saviour? Journal of Emerging Market

Finance, 17(3S), 299S–326S.

Baltagi, B. H. (2008). Econometric Analysis of Panel Data. John Wiley & Sons. New Jersey.

Bian, W., Wang, X., & Sun, Q. (2015). Non-interest Income, Profit, and Risk Efficiencies: Evidence from Commercial Banks in China. Asia-Pacific Journal of Financial Studies, 44(5), 762-782.

Craigwell, R., & Maxwell, C. (2006). Non-Interest Income and Financial Performance at Commercial Banks in Barbados. Savings and Development, 30(3), 309-328.

Demirgü -Kunt, A., & Huizinga, H (2010). Bank Activity and Funding Strategies: The Impact on Risk and Returns. Journal of Financial Economics, 98(3), 626-650.

DeYoung, R., & Rice, T. (2004). Noninterest Income and Financial Performance at U.S. Commercial Banks. Financial Review, 39(1), 449-450.

Edwards, F. R. & Mishkin, F. S. (1995). The Decline of Traditional Banking: Implications for Financial Stability and Regulatory Policy. Economic Policy Review, 1(2), 27-45.

Flamini, V., McDonald , C. & Schumacher, L. ( 2009). The Determinants of Commercial Bank Profitability in Sub-Saharan Africa. IMF Working Paper WP/09/15. IMF. Washington DC.

Fredriksson, A., Maresch, D. and Moro, A. (2017). Much Ado About Nothing? Interest and Non-Interest Products and Services: Their Impact on Small Banks’ Margins. Cogent Economics & Finance, 5(1), 1339771.

Guru, B. K., Staunton, J. & Shanmugam, B. (2002). Determinants of Commercial Bank Profitability in Malaysia. Journal of Money, Credit, and Banking, 17, 69-82.

Hunjra, A. I., Zureigat, Q., Tayachi, T., & Mehmood, R. (2020). Impact of Non-Interest Income and Revenue Concentration on Bank Risk in South Asia. Banks and Bank Systems, 15(4), 15-25.

Isshaq, Z., Amoah, B., & Appiah-Gyamerah, I. (2019). Non-Interest Income, Risk and Bank Performance. Global Business Review, 20(3), 595-612.

Karakaya, A., & Er, B. (2013). Noninterest (Nonprofit) Income and Financial Performance at Turkish Commercial and Participation Banks. International Business Research, 6(1),


Lee, C-C., Yang, S-J., & Chang, C-H. (2014). Non-Interest Income, Profitability, and Risk in Banking Industry: A Cross-Country Analysis. The North American Journal of Economics and Finance, 27, 48-67.

Mndeme, R. K. (2015). Impact of Non-interest Income on Banking Performance in Tanzania. International Journal of Economics, Commerce and Management, 3(5), 75-92.

Naceur, S.B. & Goaied, M. (2001) The Determinants of The Tunisian Deposit Banks' Performance. Applied Financial Economics, 11(3), 317-319.

Ndubuaku V. C., Ohaegbu O.K. & Nina N. M. (2016). Impact of Treasury Single Account on The Performance of The Banking Sector in Nigeria. IOSR Journal of Economics and Finance, 8(4), 8-15.

Prabha, G., Ravichandran, K. & Gopinathar, P. (2016). Non-Interest Income in Indian Banking Sector. IOSR journal of Business and Business and Management, 18(11), 51-53.

Rogers, K. & Sinkey, J. F. (1999). An Analysis of Non-Traditional Activities at US Commercial Banks. Review of Financial Economics, 8(1), 25-39.


Sun, L., Wu, S., Zhu, Z. & Stephenson, A. (2017). Noninterest Income and Performance of Commercial Banking in China. Hindawi Scientific Programming, Special Issue, 4803840.

Williams, B. (2016). The Impact of Non-interest Income on Bank Risk in Australia. Journal of Banking and Finance, 73, 16-37.

DOI: Abstract - 0 PDF - 0


  • There are currently no refbacks.

View My Stats