Capital Structure and Financial Performance of Quoted Deposit Money Banks (DMBs) in Nigeria
Sani Abdul Rahaman Bala, Mohammed Auwal Babangida
Asian Journal of Economics, Business and Accounting · pp. 1–10 · Published 1 Mar 2022
10.9734/ajeba/2022/v22i530557Abstract
This study examined the influence of capital structure on the financial performance of DMBs in Nigeria. The study sampled 6 (six) out of 24 quoted DMBs in Nigeria as of December 2020, which was arrived at using the Stratified and purposive sampling technique. Financial performance (DV) was proxied by Net Interest Margin. Capital Structure (IV) was proxied by Short Term Debt Ratio and Long-Term Debt Ratio. A panel regression model was employed for data analysis. The analyses exert that, at 5% level of significance, P-values indicates that short-term debt (STDTA = 0.94), TDTA (0.31) have considerable impact on ROA. While long-term debt (LTDTA) has a moderate impact on ROA at 9%. The study recommends that to improve financial performance, banks management should evaluate a tradeoff between SHTD and LGTD when deciding on capital structure.
Cited by 2
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