Chapter One — 1.1 Background to the Study

Over the past decade, the relationship between deposit mobilization and profitability of deposit money banks has become a subject of considerable debate among scholars and industry practitioners alike, particularly within the context of Lagos State where operating conditions differ markedly from more developed markets.

Lagos State presents a useful setting for examining this relationship precisely because the conditions there — structural, regulatory, and behavioural — differ from those typically assumed in the broader literature, most of which draws on evidence from more developed economies.

1.2 Statement of the Problem

Despite a growing body of literature on deposit mobilization, there remains limited consensus on the precise nature of its relationship with profitability of deposit money banks, particularly within Lagos State. Many organizations continue to make decisions about deposit mobilization without a clear, evidence-based understanding of how those decisions ultimately affect profitability of deposit money banks. This gap between practice and empirical understanding is the central problem this study seeks to address.

1.3 Objectives of the Study

1. To examine the effect of Deposit Mobilization on profitability of deposit money banks in Lagos State.
2. To assess the extent to which deposit mobilization influences profitability of deposit money banks within the study area.
3. To identify the challenges associated with deposit mobilization in relation to profitability of deposit money banks.
4. To recommend strategies for optimizing deposit mobilization in order to improve profitability of deposit money banks.

1.4 Research Questions

1. What is the effect of deposit mobilization on profitability of deposit money banks in Lagos State?
2. To what extent does deposit mobilization influence profitability of deposit money banks within the study area?
3. What challenges are associated with deposit mobilization in relation to profitability of deposit money banks?
4. What strategies can be adopted to optimize deposit mobilization in order to improve profitability of deposit money banks?

1.5 Significance of the Study

This study is significant to a range of stakeholders. For policymakers and regulators, the findings offer evidence to guide the design of frameworks that support healthier outcomes around profitability of deposit money banks. For managers and practitioners within Lagos State, the study provides practical insight into how deposit mobilization can be better managed. Finally, it contributes to the academic literature on finance / banking by extending existing knowledge into a specific empirical context, and offers a reference point for future researchers.

1.6 Scope of the Study

The study is limited to an examination of Deposit Mobilization and its relationship with profitability of deposit money banks within the context of Lagos State. It reflects a BSc-level scope of analysis and relies on data and perspectives available within that scope; generalizing the findings beyond this specific context should therefore be done with appropriate caution.