Social Responsibility Cost and Its Influence on the Profitability of Nigerian Banks

Abstract

This study aims at determining the influence of social responsibility cost on the profitability of Nigerian banks. In order to control environmental cost and the impact of the potential hazards presented by the operations of firms in the banking industry, such firms usually strive to act socially responsible ways. The study made used of an exploratory research design and data were collected from five Nigerian banks through secondary sources and analyzed using the Ordinary Least Square (OLS) method. The study revealed that there is a negative influence between social cost and pollution cost on profitability. Conclusively, social responsibility cost is as vital as all other liabilities of the banks, and it requires proper management. It is recommended that the Financial Reporting Council (FRC) of Nigeria should collaborate with other professional bodies, the academia and other stakeholders to produce a standard on social responsibility accounting and should ensure there is compliance and transparency in the process.