The Impact Of Corporate Social Responsibility On Profitability In Nigeria Banking Industry (A Case Study Of First Bank Of Nigeria Plc)
The focus of this project is to elucidate the Impact of Corporate Social responsibility on the Profitability of the Nigerian Banking Sector. As a matter of fact Corporate Social Responsibility (CSR) as a concept entails the practice where by corporate entities voluntarily integrate both social and environmental upliftment in their business philosophy and operations. For comprehensive understanding, this project is presented in five chapters. Chapter one include the introduction, chapter two comprise of the literature review, chapter three contain the research methodology, chapter four contains the result and discussions while chapter five contains the summary, conclusion and recommendation.
The rising cost of running business organizations in Nigeria and the lack of basic infrastructure, as well as divergent views in the literature regarding the type of relationship that exists between CSR and Corporate performance have necessitated this paper that examined the relationship between corporate social responsibility and profitability in the Nigerian banking industry using First Bank of Nigeria (FBN) Plc as the case study. Annual reports formed the secondary source of data collection where the CSR expenditure and profit after tax for the period of 2001-2010 was used for the computational experiment. The data collected for this study were analysed using correlation and regression analysis. The hypothesis formulated was tested. The results of the regression analysis as showed the impact of corporate social responsibility expenditure on profitability in Nigeria banks which revealed (Beta= 0.945, p<.01). This means that for every unit change
increment in the CSR expenditure will lead to .945 or 95% increase in the profit after tax of the company. The R-square was 0.893 which shows that CSR accounted for 89.3% of the variation in the profit after tax of First Bank Plc. The study concluded that there is positive relationship between banks CSR activities and profitability. The implications of this study include the need for banks to demonstrate high
level of commitment to corporate social responsibility based on stakeholder theory in order to enhance their profitability in the long run.