AN INSIGHT INTO AGENCY BANKING AND FINANCIAL PERFORMANCE OF MONEY DEPOSIT BANKS IN NIGERIA

Abstract

Agency Banking is an organization that acts in some capacity on behalf of another bank. The relationship between agency banking and financial performance of banks is yet to be determined Therefore, this study x-rayed the relationship between agency banking and financial performance of money deposit banks in Nigeria. The objective of the study is to examine the extent cash deposit, loans/interest and account opening services has influenced financial performance of the principal bank. To guide this study three research questions were raised and a descriptive research design was adopted with a total population of 18 money deposit banks located within Port Harcourt metropolises of Rivers State. The proportionate stratified random sampling technique was adopted whereby 4 (four) representatives from each of the 18 money deposit banks in Rivers State were drawn as target respondent who will answer on behalf of organization(s). Therefore, the sample size is 72 money deposit bank representatives. These four representatives include: (Head of Operations, Head of Accounting, Head of Customer Care, and Head of ICT department) from each the 18 money deposit banks in Rivers State. The instrument for data collection for this study will be the questionnaire. This study employed a 4-point Likcrt scaled questionnaire to decide the sets of answers from subjects with the following representation Very Low Extent = 1, Low extent= 2, High Extent = 3, Very High Extent = 4. A total of 72 copies of questionnaires were administered to respondents in the various money deposit banks under review at their head offices in Port Harcourt metropolises with the assistance of two research assistants and same number was retrieved. The Mean and Standard Deviation were used to answer the research questions. Based on the findings of this study, the therefore concludes that agency banking operations facilitates expansion in geographic coverage, increases new customers data base and enhance efficiency in service delivery to retail customers. These activities thereby increase the banks financial performance. Therefore, the study recommends that more products should be channeled through the agent network to increase revenue streams for both bank and then agent; and also policies, regulations, procedure manuals and internal controls should be frequently updated and enforced.