Abstract
This study investigated the effect of capital adequacy on financial performance of listed deposit money banks in Nigeria from 2012-2023. The study population comprised all listed deposit money banks, out of which fourteen (14) were selected. Secondary data was obtained from the yearly published financial statements of the banks and was analyzed via descriptive statistics (mean, standard deviation, minimum value, maximum value, skewness, kurtosis and Pearson correlation), diagnostic statistics (variance inflation factor, Breusch-Pagan/Cook-Weisberg, Ramsey RESET, Cameron & Trivedi’s decomposition of information –matrix, and Hausman specification tests), and inferential statistics (fixed and random effects). The result revealed that capital adequacy ratio (t-value = 2.81; p-value = 0.006 < 0.05%) significantly influence financial performance of deposit money banks. On the basis of the findings, it was recommended among others that deposit money banks’ regulators need to sustain the current capital cash requirements by constantly reviewing it to meet with global best practices. In addition, stakeholders including investors, management and deposit money banks’ regulators should focus attention and put beam light on the level of capital requirements of listed deposit money banks in Nigeria.
Keywords
Capital adequacy; Deposit money banks; Financial performance; Credit risk
Citations
IRE Journals:
Igemohia Mohammed , OMOYE Ezie Israel , Odiri V.I.O.
"Capital Adequacy and Financial Performance of Deposit Money Banks in Nigeria" Iconic Research And Engineering Journals Volume 8 Issue 9 2025 Page 1368-1375
IEEE:
Igemohia Mohammed , OMOYE Ezie Israel , Odiri V.I.O.
"Capital Adequacy and Financial Performance of Deposit Money Banks in Nigeria" Iconic Research And Engineering Journals, 8(9)
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