Cash Flow Analysis, Human Capital Investment and Net Interest Income of Quoted Commercial Banks in Nigeria
Vol.4, Issue 2
This study examined how cash flow analysis and human capital investment affect net interest income of commercial banks in Nigeria. Cross sectional data were sourced from the financial statement of the commercial banks from 2009 to 2018. Net interest income was used as dependent variables while investment on employee training, investment on employee education, investment on employee health, differed employee payment, operating cash flow, cash flow from financing activities, cash flow from investing activities and net cash flow were used as independent variables. Ordinary least square method of panel co-integration, unit root, granger causality test was used. The study found among other things that operating cash flow was showed negative relationship with net interest income. Similarly, net cash flow has negative relationship with net interest income. Investment on employee training and education has positive relationship with net interest income while differed payment has positive relationship with net interest income. From the findings, the study concludes that cash flow analysis and human capital investments have significant effect net interest income of commercial banks in Nigeria. We, therefore recommend that management of commercial banks should investment more on employee education as this can make the employees acquire dynamic knowledge in bank management such as credit appraisal that reduces the incidence of nonperforming loans and increase profitability. Furthermore, employees differed payment procedures should be well planned and seamlessly integrated into management broad policies of investment and financing decisions.
Keywords: Cash Flow Analysis, Human Capital Investment, Net Interest
