Bank Performance versus Recession Indicators: A Linear Cointegration Approach

  • Ashamu Sikiru Oyerinde Department of Banking and Finance, Faculty of Management Sciences , Lagos State University, Ojo, Lagos,Nigeria
Keywords: Banks, exchange rate, inflation, interest rate and cointegration


In this study, the researcher provides an empirical investigation of the nexus between banks’ performance and recession indicators. A sample size of 35 years was selected on annual data. A linear cointegration method was adopted after accounting for seasonality through logarithmic transformation. The results revealed that indicators of recession-exchange rate, inflation and interest rate maintain long run relationship with bank performance, and evidence of long run influence was established. Furthermore, we discover that within the purview of short run dynamic situation, inflation influences banks’ performance inversely, while exchange rate and interest rate increase with increase in banks’ performance. We therefore conclude that banks’ performance is driven by indicators of recession both in the short and in long run.


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How to Cite
Oyerinde, A. S. (2017). Bank Performance versus Recession Indicators: A Linear Cointegration Approach. Indian Journal of Finance and Banking, 1(1), 8-15.
Regular Research Article/ Short Communication Article