Cost Reduction Strategy and Firm Profitability during Recession Period : Nigerian Banking Industry Experience

Patrick Amaechi Egbunike; Segun Idowu Adeniyi

doi:10.12816/0041760

Article Details

Cost Reduction Strategy and Firm Profitability during Recession Period : Nigerian Banking Industry Experience

Authors:

Patrick Amaechi Egbunike | Segun Idowu Adeniyi

Publisher:

Zainab Arabian Research Society for Multidisciplinary Issues ( ZARSMI )

Main Topics:

Accounting

Journal:

International Journal of Accounting Research 2017 Vol.3 Issue 3, pp.32-36

Document Type:

Article

Publication Date:

11/2017

Document Language:

English

Document ID (Org No.):

109736

Frequency:

Monthly

pISSN:

2311326X

DOI:

10.12816/0041760

Descriptors:

Keywords:

Abstract:

 Nigeria banks faced financial crisis due to financial meltdown and government treasury single account policy. This has forced banks to employed strategic cost management techniques like downsizing of employee and reduction of staff salary to survive and sustain their competitiveness in banking industry. This study examines the influence of downsizing of staff and reduction of staff salary on bank profitability. The specific objective is to ascertain the influence of downsizing of employee and reduction of staff salary on return on asset. Purposive sampling technique was used to select the sample frame from first generation of banks that are licensed with international authorization in Nigeria This study obtained secondary data from the Nigerian Stock Exchange Fact-book and Annual Report and Accounts of the sample population for the period 2006 to 2016. A linear regression analysis was used in estimating the parameter of the model. The study finds out that there is negative relationship between downsizing of employee, reduction of staff salary and profitability. It was discovered that the period after banks downsize their employee, bank performance was at its low ebb. We strongly recommend that banks can reduce their employee salary instead of laying them off. Then, salary increment can be done when the financial performance is improving.

Article Details

Cost Reduction Strategy and Firm Profitability during Recession Period : Nigerian Banking Industry Experience

Authors:

Patrick Amaechi Egbunike | Segun Idowu Adeniyi

Publisher:

Zainab Arabian Research Society for Multidisciplinary Issues ( ZARSMI )

Main Topics:

Accounting

Journal:

International Journal of Accounting Research 2017 Vol.3 Issue 3, pp.32-36

Document Type:

Article

Publication Date:

11/2017

Document Language:

English

Document ID (Org No.):

109736

Frequency:

Monthly

pISSN:

2311326X

DOI:

10.12816/0041760

Descriptors:

COST ACCOUNTING

PROFITABILITY

WAGES

BANKS

NIGERIA

Cost Reduction Strategy

Profitability

Downsizing

Salary Reduction

Issues

Article Details

Authors: Patrick Amaechi Egbunike | Segun Idowu Adeniyi

Publisher: Zainab Arabian Research Society for Multidisciplinary Issues ( ZARSMI )

Main Topics: Accounting

Journal: International Journal of Accounting Research 2017 Vol.3 Issue 3, pp.32-36

Document Type: Article

Publication Date: 11/2017

Document Language: English

Document ID (Org No.): 109736

Frequency: Monthly

pISSN: 2311326X

DOI: 10.12816/0041760

Descriptors:

Issues

Authors:

Patrick Amaechi Egbunike | Segun Idowu Adeniyi

Publisher:

Zainab Arabian Research Society for Multidisciplinary Issues ( ZARSMI )

Main Topics:

Accounting

Journal:

International Journal of Accounting Research 2017 Vol.3 Issue 3, pp.32-36

Document Type:

Article

Publication Date:

11/2017

Document Language:

English

Document ID (Org No.):

109736

Frequency:

Monthly

pISSN:

2311326X

DOI:

10.12816/0041760