Sustainability Reporting and Assets Quality of Listed Deposit Money Banks in Ghana, Kenya and Nigeria

Abstract

Bank's asset quality deteriorates when banks are exposed to high non-performing loans and associated credit risks. Sustainability reporting deepens the acceptability and understanding of huge opportunities and enhances the corporate competitive advantage of the banks in enhancing banks’ assets quality. This study investigated the effect of sustainability reporting on the assets quality of listed deposit money banks (DMBs) in Ghana, Kenya and Nigeria. The study explored secondary data, using a population of 95 listed DMBs, while a sample size of 31 DMBs was purposively selected for a period of 12 years. Data were extracted from the annual financial records of the banks and sustainability reporting checklist in line with the Global Reporting Initiative. The validity and reliability of the data were premised on the statutory audit of the financial statements. Descriptive and inferential (multiple regression) statistics were used to analyze the data at a 5% significant level. The study found that sustainability reporting significantly affected the assets quality of the listed deposit money banks in Ghana, Kenya and Nigeria (Adj R2 = 0.47, Wald-test (4, 367) = 342.18, p < 0.05). Based on the finding, the study recommended managers of the banks should exhibit high professional competence, and exercise managerial expertise and ethical practices in compliance with sustainability reporting best corporate best practices capable of enhancing the assets quality of the banks.