<abstract xmlns="http://www.w3.org/1999/xhtml"><p>The study examines the impact of capitalization on bank performance of some selected commercial banks in Nigeria using econometric analysis on annual time series data of ten banks over the period of 2006 to 2014. The results from a Levin, Lin &amp; Chu unit root test show that all the variables were non-stationary. The results from a Panel Least Square (PLS) estimate found that operating expenses, bank size and bank loan are negatively related to profitability but only bank loans are significant. On the other hand, bank deposit and bank liquidity are positively related to profitability but not significant. This conclusion has important policy implications for emerging countries like Nigeria as it suggests that capitalisation and total assets of a bank should be periodically evaluated. The regulatory authorities will therefore need to put in place appropriate machinery that will address issues of bank liquidity and assure asset quality in the industry.</p></abstract>

The study examines the impact of capitalization on bank performance of some selected commercial banks in Nigeria using econometric analysis on annual time series data of ten banks over the period of 2006 to 2014. The results from a Levin, Lin & Chu unit root test show that all the variables were non-stationary. The results from a Panel Least Square (PLS) estimate found that operating expenses, bank size and bank loan are negatively related to profitability but only bank loans are significant. On the other hand, bank deposit and bank liquidity are positively related to profitability but not significant. This conclusion has important policy implications for emerging countries like Nigeria as it suggests that capitalisation and total assets of a bank should be periodically evaluated. The regulatory authorities will therefore need to put in place appropriate machinery that will address issues of bank liquidity and assure asset quality in the industry.

Capitalization and bank performance: Evidence from Nigerian Banking Sector

Financial Internet Quarterly

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

{"article-title":"Capitalization and bank performance: Evidence from Nigerian Banking Sector"}

The study examines the impact of capitalization on bank performance of some selected commercial banks in Nigeria using econometric analysis on annual time...

Capitalization and bank performance: Evidence from Nigerian Banking Sector

Data publikacji: 06 sie 2018

Zakres stron: 67 - 75

Otrzymano: 08 lut 2016

Przyjęty: 30 paź 2017

DOI: https://doi.org/10.1515/fiqf-2016-0036

Słowa kluczowe
Capitalization, Bank Performance, Commercial Bank, Nigeria

© 2017 Taiwo Adewale Muritala et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Capitalization and bank performance: Evidence from Nigerian Banking Sector

Data publikacji: 06 sie 2018

Zakres stron: 67 - 75

Otrzymano: 08 lut 2016

Przyjęty: 30 paź 2017

DOI: https://doi.org/10.1515/fiqf-2016-0036

Słowa kluczoweCapitalization, Bank Performance, Commercial Bank, Nigeria

© 2017 Taiwo Adewale Muritala et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Słowa kluczowe
Capitalization, Bank Performance, Commercial Bank, Nigeria