Macroeconomic Volatility and Financial Performances of Deposit Money Banks in Nigeria.

This study aims to determine the effects of volatility in macroeconomic variables on financial performance of deposit money banks (DMBs) in Nigeria. A GARCH analysis of secondary data on aggregate bank profits, cash reserve ratio (CRR), liquidity ratios (LR), foreign exchange (FXR), minimum rediscount rate (MRR)/monetary policy rate (MPR), inflation rate (INFR), lending rate (INT) and gross domestic product (GDP) shows that there exists volatility in these variables with MRR/MPR, FXR, INFR and GDP positively affecting bank financial performance; and INT, CRR and LR negatively affecting bank financial performances. These findings necessitates the initiation of policies by monetary authorities at increasing MRR/MPC, FXR, INFR and GDP, and reducing INT, CRR and LR to
improve bank financial performances and overall financial stability in Nigeria.