Bankometer Appraisal Of Commercial Banks Soundness In Nigeria
Dr. Henry Waleru Akani
Department of Banking and Finance, Rivers State University Nkpolu - Port Harcourt, Rivers State, Nigeria
Lucky, Anyike Lucky
Department of Banking and Finance, Rivers State University Nkpolu - Port Harcourt, Rivers State, Nigeria
Keywords: Bankometer Appraisal, Commercial Banks Soundness, Capital adequacy, new generation Bank, Old generation Bank
Abstract
This study appraised the soundness of the old and new generation banks using Bankomter. The objective was to examine the difference between the old and new generation banks between 2019 and 2020. Time series data of the variables were sourced from financial statements of the quoted commercial banks within the period. The study used capital adequacy, capital assets ratio, equity to total assets, nonperforming loans ratio, income ratio and loan to assets ratio. Simple average and ranking was used as data analysis method. The result measured the Bank soundness using Bankometer S-score which assigned different weight to the variables of the model. From the analysis the Union bank is ranked the first while United Bank for Africa is rank the second while Stanbic IBTC is ranked third. However, the banks are judged to sound based the value of the S-score which is greater than 50 in 2019. From the analysis the Wema bank is ranked the first while Sterling is rank the second while United Bank for Africa is ranked third. However, the banks are judged to sound based the value of the S-score which is greater than 50 in 2020. From the findings the study concludes that there is no significant difference between the old and the new generation banks. The recommend that policies should further be made to deepen the capital adequacy of the commercial banks to enhance capital adequacy of the quoted commercial banks in Nigeria and the management and the regulatory authorities should ensure that the asset quality of the commercial banks is line with international standard.