Abstract

The question about whether consolidation policy can raise bank’s productivity is an interesting subject of discourse in monetary theory, though not too common. This present paper applied the Malmquist Data Envelopment Analysis to examine the total factor productivity changes (TFPC) of fifteen major deposit money banks in Nigeria over the 2004/2005 bank consolidation period, three years before and after. The results showed a similar productivity change in the pre- and bank consolidation era but revealed a slight reduction in the productivity thereafter. What constituted the major source of productivity growth in the banking industry was technological progress. However, there was no significant difference in the productivity change of the domestic and foreign banks, whose majority shares were held by expatriates.

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