Chapter One — 1.1 Background to the Study

Over the past decade, the relationship between deposit mobilization and financial performance of commercial banks has become a subject of considerable debate among scholars and industry practitioners alike, particularly within the context of the Nigerian Capital Market where operating conditions differ markedly from more developed markets.

Within the context of the Nigerian Capital Market, this relationship carries particular significance. Organizations in this setting operate under a distinct combination of economic, regulatory, and market conditions that may amplify or dampen the effect of deposit mobilization on financial performance of commercial banks, making a context-specific inquiry both timely and necessary.

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 financial performance of commercial banks, particularly within the Nigerian Capital Market. Many organizations continue to make decisions about deposit mobilization without a clear, evidence-based understanding of how those decisions ultimately affect financial performance of commercial 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 financial performance of commercial banks in the Nigerian Capital Market.
2. To assess the extent to which deposit mobilization influences financial performance of commercial banks within the study area.
3. To identify the challenges associated with deposit mobilization in relation to financial performance of commercial banks.
4. To recommend strategies for optimizing deposit mobilization in order to improve financial performance of commercial banks.

1.4 Research Questions

1. What is the effect of deposit mobilization on financial performance of commercial banks in the Nigerian Capital Market?
2. To what extent does deposit mobilization influence financial performance of commercial banks within the study area?
3. What challenges are associated with deposit mobilization in relation to financial performance of commercial banks?
4. What strategies can be adopted to optimize deposit mobilization in order to improve financial performance of commercial banks?

1.5 Significance of the Study

Beyond its academic contribution to the field of finance / banking, this study has practical value for management teams within the Nigerian Capital Market seeking to understand how deposit mobilization translates into measurable outcomes around financial performance of commercial banks. It is equally useful to students and future researchers looking for a localized empirical reference on this relationship.

1.6 Scope of the Study

The study is limited to an examination of Deposit Mobilization and its relationship with financial performance of commercial banks within the context of the Nigerian Capital Market. 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.