Financial Derivative And Financial Performance Of Listed Commercial Banks In Nigeria

Abstract

This study examined Nigeria's Financial Derivatives and the Financial Performance of Listed Commercial Banks. A period of ten (10) years (2013 to 2022) was covered, and an ex-post facto research design was adopted and employed all fourteen (14) listed commercial banks. Earnings per Share (EPS) was used as a measure of performance. At the same time, Financial Derivative Assets (FDA), Financial Derivative Liabilities (FDL), Financial Derivative Trading Income (FDTI), and Financial Derivative Disclosure (FDD) were measures of financial derivatives. Results revealed that FDA, FDTI, and FDD have a positive significant effect (5%) on earnings per share. In contrast, FDL has an insignificant effect on Earnings per share of listed Commercial banks in Nigeria. The study, therefore, recommends that corporate managers, especially those within the banking sector, should engage in or drive policies that will promote the use of derivatives. This will increase the bank's holdings of derivative assets and derivative trading income to increase their earnings, which will, in the long run, enhance the performance of commercial banks in Nigeria. Financial Regulators should organize conferences and symposia for Commercial Banks to enhance their knowledge base on the effective use of financial market derivatives