EFFECT OF CORPORATE SOCIAL RESPONSIBILITY ON THE FINANCIAL PERFORMANCE OF BANKS IN NIGERIA

This study examined the effect of corporate social responsibility (CSR) on the financial performance of deposit money banks in Nigeria. Specifically, it investigated the impact of CSR expenditure (measured by donations) on earnings per share (EPS) and gross earnings (GE) of five selected banks over a 10-year period (2014–2023). The research adopted an ex-post facto design, with data extracted from the annual financial reports of the selected banks. The population comprised all 26 deposit money banks in Nigeria, from which a purposive sample of five banks was drawn. Descriptive statistics and panel ordinary least squares (OLS) regression were employed for data analysis and hypothesis testing. The findings revealed a positive and significant relationship between CSR expenditure and EPS, indicating that increased CSR spending enhances shareholder value. Conversely, a negative and significant relationship was observed between CSR expenditure and gross earnings, suggesting that CSR activities may reduce overall revenue in the short term due to associated costs. Overall, CSR was found to have a statistically significant effect on the financial performance of Nigerian banks. The study concludes that while CSR contributes positively to EPS, banks must strategically manage its costs to avoid adverse impacts on gross earnings. It recommends that Nigerian banks integrate CSR into their core strategies to balance stakeholder expectations with profit maximization objectives, thereby promoting sustainable financial performance and societal development.