IMPACT OF AGENCY BANKING AND CUSTOMER SATISFACTIONS ON THE FINANCIAL PERFORMANCE OF FIRST BANK OF NIGERIA PLC.

Abstract

The study investigates the impact of agency banking on the financial performance of First Bank of Nigeria Plc, specifically at the Market Branch in Yola. Agency banking, promoted by the Central Bank of Nigeria (CBN) since 2013, aims to enhance financial inclusion. The research adopts a descriptive survey design, combining primary data (questionnaires from 32 bank staff and 218 customers) with secondary data (transaction records from 2013–2023). Dependent variable: Financial performance is primarily measured via Return on Equity (ROE), while independent variable: agency banking is assessed through CBN regulation, low-cost service delivery, and improved accessibility/market share. findings from respondent perceptions and statistical tests (T-tests at 95% confidence level) show: CBN regulation significantly and positively affects financial performance (t-cal = 9.333 > t-table = 1.960; 87.5% agreement). Low transaction costs via agency banking significantly improve performance (t-cal = 7.317 > 1.960; 75% agreement that costs positively influence bank performance). Accessibility and expanded market share through agents significantly enhance performance (t-cal = 6.383 > 1.960; ~77–82% agreement on accessibility, market expansion, and profitability links). The study rejects all three null hypotheses, concluding that agency banking drives better financial outcomes by reducing costs, increasing convenience, reaching underserved areas, and boosting customer base and transaction volumes. It is grounded in agency theory and bank-led theory. Recommendations include strengthening regulation/oversight, improving bank-agent coordination, investing in technology, expanding agent networks to rural areas, training agents, ensuring liquidity, and promoting customer education to sustain these benefits and to enhance financial inclusion