The Impact of Corporate Social Responsibility on Profitability in Nigeria Banking Industry
CHAPTER ONE
The Purpose of the Study
The main aim of this study to examine the impact Corporate Social Responsibility of First Bank of Nigeria PLC vis-à-vis its profitability. The study is essentially geared towards achieving the following objectives:
- To examine Corporate Social Responsibility in relation to banks in Nigeria with FBN plc in focus.
- To evaluate the impact of Corporate Social Responsibility on the profitability of the Nigerian banking sector.
- To examine the challenges of Corporate Social Responsibility in the Nigerian banking sector.
- To investigate whether Corporate Social Responsibility guarantee customers’ confidence and security of depositor’s fund.
CHAPTER TWO
REVIEW OF LITERATURE
INTRODUCTION
Our focus in this chapter is to critically examine relevant literature that would assist in explaining the research problem and furthermore recognize the efforts of scholars who had previously contributed immensely to similar research. The chapter intends to deepen the understanding of the study and close the perceived gaps.
CONCEPTUAL FRAMEWORK
CORPORATE SOCIAL RESPONSIBILITY
In a given society, banks cannot ignore the environment and major coalition members with which they interact. This is because the raison d’être for their existence-the accumulation of capital is only possible through the existence of their societies which otherwise constitute their markets (Hopkins, 2004).
In this way, corporate social responsibility is the inherent obligation of each business entity to account for the way its activities impact on the economic, social and environmental dimensions of its environs and to ensure that this impact generates equitable and sustain nable benefits-and no harm-to all stakeholders involved (De Regil, 2003).The stakeholders represent the various interest groups of society where the company operates. They comprise of workers, consumers, and indigenous groups all with a legitimate right to demand socially responsible and right corporate behaviour. The stakeholders include all the members belonging to the corporation’s social environs, which contribute to or are encumbered by the corporation’s activity. Corporate social responsibility (CSR) is thus concerned with treating the stakeholders of the firm ethically or in a responsible manner (Hopkins, 2004). ‘Ethically’ or ‘responsibly’ means treating stakeholders in a manner deemed acceptable in civilized societies. Stakeholders exist both within a firm and outside. Even the natural environment is a stakeholder (Carrol and Buchholz, 1999). The wider aim of social responsibility is to create higher standards of living while preserving the profitability of the corporation (Stakeholder Alliance, 2002).
CHAPTER THREE
RESEARCH METHODOLOGY
Area of Study
First Bank First Bank Of Nigeria Limited (Firstbank), is a Nigerian multinational bank and financial services company headquartered in Lagos Nigeria.It is the premier bank in West Africa with its impact woven into the fabric of society. First Bank of Nigeria Limited operates as a parent company in Nigeria, with the subsidiaries FBNBank in the Republic of Congo, Ghana, The Gambia, Guinea, Sierra-Leone and Senegal; FBN Bank UK Limited in the United Kingdom with a branch in Paris; FirstBank Representative Office in Beijing to capture trade-related business between geographies.
FirstBank has a The FirstBank Group employs over 16,000 staff and is proudly a multiple Best Place to Work awardee. It operates along four key Strategic Business Units (SBUs) – Retail Banking, Corporate Banking, Commercial Banking and Public Sector Banking. It was previously structured as an operating holding company before the implementation of a non-operating Holding Company structure (FBN Holdings) in 2011/2012.
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
INTRODUCTION
This chapter presents the analysis of data derived through the questionnaire and key informant interview administered on the respondents in the study area. The analysis and interpretation were derived from the findings of the study. The data analysis depicts the simple frequency and percentage of the respondents as well as interpretation of the information gathered. A total of Forty-Seven questionnaires were administered to respondents of which were returned and validated. For this study a total of Thirty-Nine (39) was validated for the analysis.
The table below shows the summary of the survey. A sample of 302 was calculated for this study.
CHAPTER FIVE
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS:
INTRODUCTION
This chapter summarizes the findings into the the impact of corporate social responsibility on profitability in Nigeria banking industry using First Bank Plc Ikeja, Lagos State as case study. The chapter consists of summary of the study, conclusions, and recommendations.
SUMMARY OF THE STUDY
The study aimed at examining Corporate Social Responsibility in relation to banks in Nigeria with FBN plc in focus. it evaluated the impact of Corporate Social Responsibility on the profitability of the Nigerian banking sector. it examined the challenges of Corporate Social Responsibility in the Nigerian banking sector. it investigated whether Corporate Social Responsibility guarantee customers’ confidence and security of depositor’s fund. Survey research design was employed for the study, using purposive sampling method forty-seven(47) respondent who are staff in Firstbank Ikeja branch was selected. Questionnaire was issued to them and thirty-nine (39) was retrieved and validated fro the study. Data was analyzed using frequency and tables which provided answers for the research questions.
CONCLUSION
Findings from the study reveals that CRS impacts the profitability of the banking industry by enhancing their reputation, gives them better brand recognition, enhance recruitment and retaining of high quality workers increases their organizational performance and productivity. However in the banking industry only few does engage in CSR due to challenges such as pressure from stakeholders and influence of investors. Thus Corporate Social Responsibility of a bank guarantee the customers’ confidence level and security of depositor’s fund giving them an edge in getting more patronage than those firms who do not practice CSR.
RECOMMENDATION
From the findings and conclusions, the following recommendations are made:
- Listed deposit money banks should continue to invest in corporate social activities as much as practicable because they result into increase in profitability.
- Listed deposit money banks should leverage on their social responsibility expenditures by ensuring that they are linked or connected to profitable operations.
- Top management should understand the strategic financial benefits of CSR activities.
- Since banking industries considers investment in social responsibility as beneficial to the society and its own business operation, it will be necessary for the industry to earmark more funds as social responsibility investment fund so as to meet the increasing demands from members of the public for its social assistance.
- Banking industries must include CSR initiates in their strategic plans in order to get higher reputation.
REFERENCE
- Adrian P and B Hartley (4th ed.) (2002). The Business Environment. New York: McGraw-Hill Educational.
- African Journal of Business Management (2010). Vol. 4 (12) 2796-2801, 4th October.
- Aluko, O., Odugbesan, O., Gbadamosi, G. and Osuagwu, L. (2004), “Business responsibility and management ethics”, Business Policy and Strategy, pp. 141-51.
- Amaechi, K. et al. (2006). “Corporate Social Responsibility in Nigeria: Western Mimicing or Indigenous Influence?” No. 39, ICCSR Research Paper Series.
- Arx, UV, Ziegler, A. (2008). The Effects of CSR o Stock Performance: New Evidence for USA and Europe. Economic Working Paper Series, Swiss Fxederal Institute of Technology, Zurich.
- Baker, M. (2006). “Discharging Social Responsibility” www.mallenbaker.net/csr.htm downloaded on 10th June, 2007.
- Brammer, S., Millington, A., Rayton, B. (2007). The Contribution of Corporation Social Responsibility to Organizational Commitment. Int. J. Hum. Res. Manag. 18 (10): 1701-1719.
