Corporate Social Responsibility Spending and Financial Performance of Nigerian Banks

Corporate social responsibility has evolved from a voluntary philanthropic practice into a structured governance obligation for financial institutions operating in emerging market contexts. This study examines the relationship between corporate social responsibility expenditure and financial performance among deposit money banks in Nigeria. Using secondary data extracted from the sustainability reports and annual financial statements of ten listed banks on the Nigerian Exchange Group for the period 2018 to 2022, the study applies panel regression analysis to assess whether corporate social responsibility spending significantly influences return on assets, return on equity, and earnings per share. The research is anchored on stakeholder theory, legitimacy theory, and the resource-based view, each of which provides a distinct perspective on why and how banks engage in social investment. The geographic scope of the analysis considers the distribution of community development spending across Nigeria's six geopolitical zones, evaluating whether proximity to high-impact communities in the South South and North East correlates with higher social expenditure levels. Existing scholarship yields inconclusive findings on the financial returns to social responsibility spending, creating a gap this study addresses through a Nigerian-specific empirical investigation. The study also examines disclosure quality as a moderating variable in the corporate social responsibility-performance relationship. Findings will be useful to the Central Bank of Nigeria's sustainable finance initiative, the Financial Reporting Council of Nigeria, and institutional investors applying environmental, social, and governance screening criteria. Keywords: corporate social responsibility, bank performance, sustainability, Nigerian banks, stakeholder theory