Commercial Banks Portfolio and Economic Activity in Nigeria

The book project examined the impact of banks portfolio composition on economic activity in Nigeria. It aimed at examining the channels through which banks loans and investments influences the Gross Domestic Product (GDP). Secondary data were employed in the analysis of the work. In analysing the data, we made use of both desciptive and econometrics modelling techniques. The result of the analysis shows that there exist a strong relationship between the explanatory variables and the dependent variables. This can be seen from the result of the Coefficient of Determination (R2), which explains about 78 percent of the variations in the dependent variables. Also a positive relationship existed between the loans and Gross Domestic Product after two years. In the same vein, the investment portfolio of the bank also contributes significantly to the economy after the first year. The study thereby concludes that banks loans and investment variables have a greater and positive impact on the Gross Domestic Product within the period of study.