INTEREST RATE SPREAD AND THE REVENUE OF COMMERCIAL BANKS IN NIGERIA (2005 – 2018)

The study investigated the impact of interest rate spread on revenue performance of commercial banks in the Nigerian financial system. Using the Autoregressive Distributed Lag (ARDL) framework and using data set covering 2005 to 2018, it was found that interest rate spread positively and significantly affects the profit performance of commercial banks in Nigeria. It is therefore recommended that deliberate policies be adopted to ensure interest rate regimes that enhance not just bank profitability but also the overall growth of the economy. This study concludes that proper management of the interest rate spreads of commercial banks in Nigeria may not necessarily be the only sufficient tool for the much needed financial stability for sustainable and economic development but a blend of so many other factors. A competitive banking environment promotes allocative and productive efficiency by encouraging the greatest supply of credit and advances at the lowest price.