Corporate Social Responsibility and Performance of Nigerian Banks: A Quantitative Approach

Abstract

This research investigates the impact of corporate social responsibility (CSR) activities on the financial performance of Nigerian banks. The study focuses on specific banks and draws on secondary data from audited yearly financial reports spanning from 2019 to 2022. These reports encompass a range of contributions made by the banks, encompassing areas such as education, environmental sustainability, charity, healthcare, transportation services, and responses to the COVID-19 pandemic. Panel data analysis was employed, allowing for the incorporation of both time- based and cross-sectional data. Data were analyzed with the aid of PPMCC and Linear Regressions. The findings highlight that individual and combined CSR efforts, including support for education, environmental sustainability, charity work, transportation services, healthcare, and COVID-19 relief, all have an impact on the financial performance of Nigerian banks. This underscores the diverse advantages that Nigerian financial institutions have derived from their engagement in CSR undertakings, particularly in the face of challenges brought about by the COVID-19 pandemic. The study concludes that CSR initiatives can play a significant role in improving the financial performance of Nigerian banks. Banks should therefore make CSR a priority and invest in initiatives that are aligned with their business goals and the needs of their stakeholders. As a result, the study suggests that it is essential for banks to continue and actively participate in socially responsible initiatives. This approach can prove attractive to investors who place significance on corporate social responsibility.