European Journal of Accounting, Finance and Investment

The Effects Of Monetary Policy On Portfolio Management In The Nigerian Banking Industry

Olofinlade Samuel Oluwapelumi

Department of Finance, Faculty of Management Sciences, Ekiti State University, Ado-Ekiti, Nigeria.

Keywords: Portfolio Management, Monetary policy, Banks loan policy, Deposit money banks’

Abstract

Monetary policy is a crucial factor that deserves ardent study in order to fashion out an approach of augmenting to the management of Nigerian banks’ portfolio. To articulately achieve reliable effects of monetary policy on banks there is need to design a portfolio management policy that would drive home the expectations of banking stakeholders. This study which delved into portfolio management in the banking industry and the effects of monetary policy, considered the responses to a questionnaire of the key staff in portfolio/credit management, marketing and administration in six of the existing commercial banks in Nigeria. The sample of 120 workers was drawn randomly to give room for equal representation and to avoid bias in responses. Two research questions were used for the study and statistical package for the social sciences (SPSS) version 21 was used to analyze the data. Percentage was used to rate the responses of the participants. The finding from the study showed that CBN monetary policies on portfolio management have significant effect on the banks portfolio. Also, banks policies on loan management enhances profitability if efficient, sustained and reliable loan policies were put in place.  It is therefore recommended that banks should design appropriate policies that would aid their portfolio management strategies and thus enhance their profitability and return to shareholders