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Research Article Open access CC BY 4.0

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/v22i530557

Abstract

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.

Capital structure short term debt long term debt financial performance net interest margin

Cited by 2

The Impact of Lease Accounting (IFRS 16 and IAS 17) and Financial Performance of Deposit Money Banks in Nigeria

Henshaw S Akai, Rachael E. Abusomwan · UMYU Journal of Accounting and Finance Research · 2026

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