European Academic Research ISSN 2286-4822
ISSN-L 2286-4822
Impact Factor: 3.4546 (UIF)
DRJI Value : 5.9 (B+)
Article Details :
Article Name :
Effect of Capitalization on Financial Performance: Experience from Nigerian Deposit Money Banks
Author Name :
RAYMOND A. EZEJIOFOR, MOSES C. OLISE, RACHEAL C. JOHN-AKAMELU
Publisher :
Bridge Center
Article URL :
Abstract :
This study assesses the relationship between capitalization and performance of Nigerian commercial banks. Specifically, the study intends; to evaluate the relationship between the capital adequacy and return on equity of Nigerian commercial banks; to determine the relationship between capital adequacy and earnings per share of Nigerian commercial banks and to determine the relationship between capital adequacy and net income of Nigerian commercial banks. Ex post facto design and Time series data were adopted. Data for study was collected from six years annual reports and accounts of commercial banks in Nigeria. Formulated hypotheses were tested with Pearson Correlation with aids of SPSS Version 20.0. Based on this, the study found that there is a negative significant relationship between return on equity. Also there is a significant relationship between earnings per share and net income of the bank. Based on this, the study recommends that Freedom to function efficiently as business organizations should also be given to deposit money banks; hence banks are being compelled to meet up and maintain the stipulated capital standard and requirements.
Keywords :
capitalization, financial performance and Nigerian commercial banks
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