IMPACT OF CORPORATE SOCIAL RESPONSIBILITY ON THE PROFITABILITY OF NIGERIAN DEPOSIT MONEY BANKS

ABSTRACT This study examines the effect of Corporate Social Responsibility (CSR) on the profitability of Nigerian Deposit Money Banks, focusing on three core aspects: societal expenditure, employee corporate social responsibility, and environmental management expenditure. The research investigates how these CSR initiatives impact key financial performance indicators such as net profit margin, return on capital employed (ROCE), and return on assets (ROA). Data were collected through structured questionnaires administered to bank staff, with responses analyzed using descriptive and inferential statistics. The findings reveal that CSR activities positively influence the profitability of Nigerian banks. Societal expenditure, which includes investments in community development and social welfare, significantly enhances net profit margin by fostering customer loyalty and improving the bank's reputation. Employee participation in CSR activities, supported by incentives and training programs, contributes to increased job satisfaction and retention, thereby improving ROCE. Environmental management expenditure, focusing on sustainability initiatives, is shown to reduce operational costs and improve long-term financial stability, leading to an increase in ROA. Regression analysis indicates a strong relationship between CSR and profitability, with societal expenditure, employee CSR, and environmental management explaining substantial variances in the banks' financial performance. The study concludes that CSR is not just an ethical obligation but a strategic tool for enhancing profitability in Nigerian Deposit Money Banks. Based on the findings, recommendations are made for banks to increase their societal and environmental investments, enhance employee engagement in CSR, and incorporate CSR into their core business strategies to achieve both financial success and positive social impact.