Investment Bank, Financial Performance, Economic growth and Development: An Empirical Analysis of Investment Banking Activities and Financial Market in an emerging Economy: A case study of Nigeria

Abstract

The investment bank's performance was researched and critically analysed, and how such performance might contribute to economic growth notably in Nigeria. This study is unique in the Nigerian financial market since it empirically studied connected characteristics that potentially impact investment bank performance in Nigeria. This study spanned the years 1996 through 2022. The period was marked by a credit boom, a financial recession, a rebound, and strong economic expansion.

Because of the nature of the study topics, a quantitative approach was taken. The study discovered that bank-specific characteristics, industry-specific factors, macroeconomic drivers, and institutional factors are relevant in evaluating the performance of Nigerian investment banks. That is, a critical examination of the performance of Nigerian investment banks is centred on bank-specific characteristics. This suggests that the capacity of investment banks to fulfil their essential functions is determined by internal factors such as capital, credit risk, operating expenditures, and size. Additionally, the industry strength demonstrated that the financial market's depth had an influence on investment banks. The significance of competitiveness was underlined.

Macroeconomic factors such as GDP growth, interest rates, inflation rates, and oil prices shown that a strong macroeconomic environment is required for vibrant investment banks. Lastly, institutional variables such as a developed insurance industry, political stability, the rule of law, and effective government policies can all have an impact on the success of Nigerian investment banks.

The research recommended that, in order to significantly improve the performance of investment banks in Nigeria, the following strategies be pursued aggressively: cost reduction strategy, cultural transformation, adopting a customer-centric approach to business, technological development, financial depth development, and development of a sustainable investment bank framework.

This study believes that if the recommendations are adopted, investment banks' profits would improve, allowing them to execute their core functions and contribute to the growth of the economy, particularly in a rising economy like Nigeria.