CORPORATE SOCIAL RESPONSIBILITY AND FINANCIAL PERFORMANCE OF ZENITH BANK PLC., NIGERIA

Abstract

There has been continuous argument among management scholars on whether investment in Corporate Social Responsibility (CSR) has the potential to translate to a positive impact on financial performance, and this became a concern as organizations in the banking sector often allocate considerable financial resources for the implementation of CSR despite its vague implication on financial performance. This study is focused on assessing how corporate social responsibility (both internal and external) influences the financial performance of banks, with a focus on Zenith Bank Plc., Nigeria. This research adopted a quantitative research design, elicited the required data from various secondary data sources, and adopted descriptive and inferential statistical tools for the analyses of the data gathered. Findings established that internal CSR has a negative and statistically insignificant relationship with profitability (r = -0.898, p= 0.289) and revenue growth (r = -0.789, p=0.412). Findings also revealed that external CSR has a moderate positive, but statistically insignificant, relationship with both profitability (r = 0.780, p = 0.431) and gross revenue (r = 0.645, p = 0.554). Data presented descriptively also affirmed a positive trend in both profit after tax and revenue growth over the studied period. The study concluded based on the findings that even though CSR activities may not translate to immediate positive impact on performance, the significant strategic value capable of enhancing stakeholders' trust and organizational sustainability, which they hold, can translate to positive financial performance outcomes in the future. Based on the findings, this study recommends continuous strategic investment in internal and external CSR, institutionalization of CSR performance tracking system and adoption of a longer-term perspective of the impact of CSR on financial performance variables.