Abstract:
This study assesses the effect of corporate social responsibility on profitability of some selected banks in Nigeria. A sample of five (5) banks was selected for the study that covered a period of six (6) years, from 2012 to 2017. A purposive sampling technique method was used in the selection of the sample. The five Banks selected represents twenty three percent (23%) of the quoted banks in Nigeria and with a widespread branch network, this sample is assumed to be a true representation of the quoted banks in Nigeria. Secondary data were used for this study. Data were collected on the amount spent on corporate social responsibilities and profit after tax of the banks selected for the period under study. Both descriptive and inferential statistics were used to analyse the data. The findings of the study revealed that the major areas where Corporate Social Responsibilities (CSR) are being carried out by the selected commercial banks in the study area include health sector, education sector and provision of social amenities / community development. It was further revealed that Zenith Bank made the largest contribution (45% of total contributions of all selected banks) to CSR between 2012 and 2017, while WEMA Bank made the least contribution of 3% of the total contributions of all selected banks within the same period. The average amount spent on CSR by Zenith Bank, GTB, Access Bank, First Bank and Wema Bank were 0.43%, 0.52%, 0.69%, 3.38%, 2.21 respectively of their income after tax between 2012 and 2017 The study concluded that First bank spent the highest proportion of her profit on CSR among all the selected banks, while GTBank spent the least proportion of her profit on CSR between 2012 and 2017. It was also concluded that the income generated by Zenith bankhave significant influence on the bank’s expenditure on CSR, while the income generated by GTBank, Access bank, WEMA bank and First bank does not have significant influence on expenditure on CSR. It was also concluded that CSR cost has positive effect on profitability of selected banks. The study
recommends that commercial banks in Nigeria should be encouraged by relevant government agencies to extend their expenditure on CSR to other key sectors of the economy such as agriculture, as well as small and medium scale enterprises and that expenditure on CSR by commercial banks in Nigeria should be monitored to ensure that it’s been channel to the appropriate use.
