International Journal of Research and Innovation in Social Science (IJRISS) | Volume VI, Issue VII, July 2022 | ISSN 2454–6186

The Impact of Corporate Social Responsibility on The Profitability of Nigerian Banks.

Hajara Dibal Yakadi
Unicaf University, Master’s in Business Administration- Finance

Abstract: The research focuses on the impact of corporate social responsibility on profitability. The project focus on the banking industry in Nigeria. Corporate social responsibility has been incorporated in most corporations’ activities and most times do not consider the implications it has on the corporations. Therefore, the main objective of this research is to examine the impact of corporate social responsibility expenditure on the profitability of the banks in Nigeria. The proxies for profitability are earnings per share (EPS), return on assets (ROA) and return on equity (ROE) while that of corporate social responsibility is all expenses incurred by the company for a given period.
A quantitative approach was used in this study. We made use of secondary data was gotten from the annual financial report of the selected banks. We examined the annual financial report of Access Bank Plc, Guaranty Trust Bank (GTB), United Bank for Africa (UBA), and Zenith Bank Plc. These four (4) banks are registered on Nigerian Stock Exchange (NSE). The sampling technique adopted is a probabilistic and non-probabilistic sampling technique to select the banks out of a total of twenty-two (22) banks in Nigeria. These banks were selected because they were ranked as the top banks that participate in corporate social responsibility. The data gathered was gotten from seven (7) years of the annual financial report of the four (4) selected banks. The period covered is 2015-2021 using a simple linear regression analysis through E-views 8 software.
The result showed that there is an impact of corporate social responsibility on the return on assets (ROA) and return on equity (ROE). The result also showed that there is no impact of corporate social responsibility on earnings per share (EPS).
The research concluded that the directors should ensure that they incorporate social responsibility in the bank’s activities in a way that would be of great benefit to the entity. The corporate social responsibility policy developed should consider staff welfare and government should be more involved in ensuring compliance and disclosure of the company’s social responsibility.
Keywords: earning per share (EPS), corporate social responsibility (CSR), profitability, banking, return on assets (ROA), return on equity (ROE).

I. INTRODUCTION

1.1 Background of the Study

Corporate Social Responsibility (CSR) refers to a company’s current commitment to act ethically and contribute to economic progress while additionally rising the standard of lifetime of its staff, the local people, and society (CFI, 2022). It’s one of many factors which will assist banks in gaining stakeholders’ trust, reputation, and confidence. CSR is outlined as a group of policies, practices, and programs that