EFFECT OF TOP MANAGEMENT INTERLOCKS ON DEPOSIT MOBILIZATION AND PERFORMING LOANS OF COMMERCIAL BANKS IN NIGERIA
The study examined the effect of top management interlocks on deposit mobilization and performing loans of commercial banks in Nigeria. Using an ex-post facto research design, secondary data were collected from financial reports of selected Nigerian commercial banks over a specified period. Descriptive statistics and Ordinary Least Squares (OLS) regression techniques were applied to analyse the relationship and significance of top management interlocks on the chosen performance metrics. The findings revealed a weak negative relationship and no significant effect of top management interlocks on both the deposit mobilization ratio and the performing loan ratio. These results suggest that while interlocks may offer networking advantages, they do not directly enhance deposit mobilization or loan performance. The study concludes that top management interlocks, while offering potential strategic benefits, do not significantly impact the financial performance of commercial banks in Nigeria. Recommendations include limiting the number of boards on which directors can serve to enhance their focus and effectiveness, and providing targeted training for interlocked directors to improve decision-making and performance outcomes in the banking sector.
Keywords: Top Management Interlocks, Deposit Mobilization Ratio, Performing Loan Ratio, Commercial Banks, Financial Performance.
