Covid-19 emergence and its impacts on the Nigerian banks’ soundness

Abstract

The paper investigated the impacts of Covid-19 Emergence on Nigerian banks’ soundness. The regressor is Covid-19 Emergence measured by covid-19 aggregate confirmed cases (CACC), covid-19 aggregate newly confirmed cases (CANC), covid-19 aggregate confirmed death cases (CADC) and covid-19 aggregate newly confirmed death cases (CAND) while the regressand is Nigerian banks’ soundness measured by Nigeria banks’ capital base (CAR). The ex-post facto research design was adopted. Secondary data were collected from the Nigerian Center for Disease and Control (NCDC) report, World Health Organization (WHO) report, and the Quarterly report of the Nigerian Stock Exchange (2020-2021). Generalize Autoregressive Heteroskedasticity model was adopted using Econometric Views (E-views) 9.0. The results revealed that; CACC exerted positive significant impacts on the Nigerian banks’ CAR while CANC have positive insignificant impacts on the Nigerian banks’ CAR. Again, CADC have adverse significant impacts on the Nigerian banks’ CAR. However, CAND exerted negative minimal impacts on the Nigerian banks’ CAR. Hence, the paper concludes that though the emergence of Covid-19 pandemic in human history still did not make the Nigerian banks to be unsound even when the CADC had high adverse impacts on the Nigerian banks’ CAR. This study therefore advocates that the apex bank must endeavour that banks are highly capitalized so as to hedge against unplanned economic downturns.