The Impact of Corporate Social Responsibility on the Profitability of Deposit Money Banks in Nigeria

ABSTRACTThis study assessed the impact of corporate social responsibility (CSR) practices on the financial performance of listed deposit money banks in Nigeria. Specifically, the study focused on five CSR dimensions—environmental management, community development, employee relations, product and customer service—as proxies for CSR practices, and return on assets (ROA) as a proxy for financial performance. A total of fifteen deposit money banks listed on the Nigerian Stock Exchange were included in the sample. Data were collected from the annual reports and accounts of these banks for the period from 2013 to 2022, totaling 10 years of panel data. The data were analyzed using descriptive statistics and panel regression techniques. The findings revealed there was a strong negative and significant relationship between environmental management and the financial performance (ROA) of listed deposit money banks in Nigeria, community development showed a positive and significant relationship with financial performance, employee relations exhibited a negative and significant relationship with financial performance, and product quality and customer service demonstrated a strong positive and significant relationship with financial performance. These results suggest that while certain CSR practices, such as environmental management and employee relations, negatively impact financial performance, others, such as community development and customer service, have a positive effect on the financial outcomes of the banks. The study provides insights into the importance of selecting appropriate CSR practices that align with the financial goals of deposit money banks.