EFFECT OF CORPORATE GOVERNANCE MECHANISMS ON FINANCIAL PERFORMANCE OF BANKS (A STUDY OF STANBIC IBTC PLC., ABA)

This research work is focused on Effect of Corporate Governance Mechanisms on Financial Performance of banks; a Study of Stanbic IBTC. The objectives of the study were to; determine whether corporate governance mechanisms enhance transparency and accountability, determine whether corporate governance mechanisms have significant impact on profitability, and to determine whether corporate governance mechanisms have significant impact on profitability. In carrying out this research work, three research questions were asked and three hypotheses were formulated and analyzed using tables, percentage and Chi-square (x2) statistical tool. The population size is 33 while the sample size is 30. The methodology adapted was descriptive method. The primary data was collected from questionnaire, personal interview, experimentation observation and library research while the secondary data was collected through; textbook, journals, magazine, Newspaper etc. The statistical analysis chi-square (x2) tested data fits on expected set of level significance of 0.05. In the findings, it is observed that corporate governance mechanisms do not enhance transparency and accountability, corporate governance mechanisms have significant impact on profitability, and corporate governance mechanisms have significant impact on profitability. Based on the finding the research concluded that corporate governance mechanisms play a crucial role in enhancing a company’s profitability. Effective corporate governance ensures that companies are managed in a way that is accountable and transparent, which can lead to better decision-making and improved financial performance. The researcher further recommended that banks should have audit committee in their board to enhance a higher financial performance. The members of the audit committee should be given the opportunity to discharge their duties effectively without undue influence.