Impact of financial development on bank profitability

Purpose This paper investigates the effect of financial development on bank profitability. The authors examine whether is an important determinant Design/methodology/approach ordinary least square and generalized method moments regression methods were used to analyze impact profitability Nigerian banking sector. Findings find a significant negative relationship between system deposits GDP ratio non-interest income banks. indicates that higher depresses result implies larger size system, lower banks in Nigeria. Also, observe concentration, nonperforming loans, cost efficiency level inflation are determinants Practical implications It recommended regulators should establish market-enabling policies encourage new emerge industry. entry can lead increase credit supply for economic growth. Regulators also need understand role promoting ways collaborate with towards sector development. Another implication findings asset managers will take into account prevailing development, particularly their pricing investment decisions. ensure investors get value investments study Nigeria improve finance-growth linkages through efficient allocation capital crucial sectors economy spur growth those sectors. Originality/value Evidence dealing how affects African countries scarce literature, completely absent addresses this research gap.