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PhD PROPOSAL INTRODUCTION The banking reforms introduced in Nigeria in 2005 was what triggered the unprecedented competition in the banking industry in Nigeria. The consolidation reforms generally entailed the upward review of the minimum capital requirement of banks from N2billion to N25billion (an increase of approximately, 1,150%), a decrease in the number of commercial banks operating in Nigeria from 89 to 25 (post consolidation) and a dilution in the ownership structure of most of these banks as they subsequently became publicly quoted companies on the Nigerian Stock Exchange (NSE). Generally, Competition in the banking industry has been a subject of great scholarly inquiry and continues to occupy a large body of empirical research. From public policy perspective, competitiveness of the banking sector represents a socially optimal target, since it reduces the cost of financial intermediation and improves delivery of high quality banking services, thereby enhancing social welfare. Banking competition also promotes economic growth by increasing firms’ access to external financing, lowering the costs of banking products and services, exerting corporate controls, managing and mitigating banking risks, mobilizing savings and investment opportunities and adopting efficiency strategies for improving profitability. However, Petersen and Ranjan (1995) show theoretically that Commercial banks wielding substantial market share are more beneficial to developing economies as they can lend even to young firms whose credit records may be opaque, hence leading to high loan volumes and substantial increase in both economic activities and economic growth. In practice, Cetorelli and Gamberra (2001) argue that although, concentrated banking systems offer growth opportunities for young firms, there is strong evidence of a generally depressing effect on economic growth associated with banks’ exercising substantial market share and this impacts all sectors and firms in the economy. Hence, competition in banking should be placed at the centre of any public policy agenda since it has the mechanism to respond to the dynamic changes in economic conditions, especially those that affect delivery of financial services. According to Mugume (2010), there are 2 plausible theories to determining the market share of competing banks towards measuring their profitability and it is crucial to determine which of these 2 theories more accurately describes the behavior of Nigerian Commercial banks since the economic policy implications derivable from these theories are radically diverse. The first theory postulates that an increase in banks’ profitability is directly related to the total efficiency improvement in its operations, termed the Efficiency Structure Hypothesis (ESH) theory. The Efficiency hypothesis further expatiates that an increase in the total revenue of banks as a result of improved efficiency will increase profitability. The other theory explains that an increase in the profitability of commercial banks is caused by an increase in market share, otherwise called the Structure-Conduct Performance (SCP) Hypothesis. Our major objective in this research is therefore to resolve the dilemma between the conflicting theories of SCP and ESH, especially, for a developing country like Nigeria. The other ancillary objectives are to determine the impact of profitability on: (i) the market share of commercial banks (ii) banking efficiency for commercial banks and (iii) to determine the impact of profitability on banking concentration for commercial banks in Nigeria. METHODOLOGY The study adopted the ex-post factoresearch design. Time series data for 9 years period: 2005 – 2013 were collated from secondary sources which included thepublished financial statements of all the commercial banks in Nigeria and the Central Bank of Nigeria Annual Report and Statements of Account. The Ordinary Least Square (OLS) regression technique was used to estimate the three hypotheses formulated in line with the objectives of the study. Banking financial performance, otherwise referred to as Profitability, was adopted as the dependent variable, while the independent variables were Market Share, Efficiency and Banking Concentration. RESULTS Market share had a positive but not very significant impact on the profitability of commercial banks in Nigeria (Beta coefficient = 0.08, Standard Error = 0.02, t = 4.27, R-squared = 38.7%, Adjusted R-squared = 35.8%, p = 0.000 <0.05).Banking efficiency had a negative and significant impact on commercial banking profitabilityin Nigeria (Beta coefficient = -0.47, Standard Error = 0.096, t = -4.96, R-squared = 38.7%, Adjusted R-squared = 35.8%, p = 0.000 <0.05). Banking concentration also had a negative but not significant relationship with profitability for commercial banks in Nigeria (Beta coefficient = -0.03, Standard Error = 0.077, t = -0.38, R-squared = 38.7%, Adjusted R-squared = 35.8%, p = 0.70 >0.05) CONCLUSION Based on the results of our hypotheses testing and other findings, the research recommends that: Commercial banks in Nigeria should be encourage to wield significant market share for obvious reasons such as enhanced profitability, increase customer deposit base, ability to lend to a large number of borrowers and increasing their total loan portfolio. Efficient banks can have significant market shares which can enhance their profitability in the long run but efficiency should not be the principal yard stick for measuring the impact of competition as commercial banks tend to exhibit monopolistic competitive behaviors which are detrimental to economic growth and national development. Concentrated banking systems offer growth opportunities for a developing country such as Nigeria, providing employment opportunities and bringing banking services closer to the people hence it is recommended that Commercial banks in Nigeria should deepen their concentration of bank branches to appreciable network of branches nationwide Economic policy makers are also advised to recommend measures aimed at fueling banking competition as that will generally promote the liberalization of financial markets and removing barriers to banking competition.