FINANCIAL SOUNDNESS INDICATORS AND PERFORMANCE OF LISTED DEPOSITS MONEY BANKS IN NIGERIA
Keywords:
Capital adequacy ratio, Financial soundness indicators, Liquid asset ratio, Non-performing loans, PerformanceAbstract
The study examines the relationship between financial soundness indicators and performance of deposits money banks in Nigeria. The specific objectives of the study are to ascertain the relationship between: non-performing loans and performance of deposits money banks; liquid assets ratio and performance of deposits money banks; and capital adequacy ratio and performance of deposits money banks in Nigeria. Eight (8) deposits money banks were selected from the Nigerian Stock Exchange (NSE). The secondary data used were sourced from the selected bank’s annual report and Nigerian Stock Exchange fact book over the period of 10years (from 2009 to 2018). The data collected were analysed using Pearson correlation matrix. Additional test were conducted using the regression of ordinary least square method. The results show that the coefficient of Liquid asset ratio and Capital adequacy ratio are positive indicating that they positively influence bank’s performance (ROA & ROE) during the period studied. However, Non-performing loan is detrimental to the bank’s performance since it has negative coefficient. Based on the findings, the study concludes that financial soundness indicators of banks affect and increase their performance. Although, most banks could not grow or perform as expected due to high rate of non-performing loan, but an upsurge in the percentage of capital adequacy ratio has the influence of increasing the proportion of banks performance; and with the higher liquidity, banks can also meet up with the expected and unexpected demands for cash.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2022 JOGA
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
Articles submitted to JOGA should not have been published or are currently under review by another Journal. Kindly see the guide for the preparation of the manuscript for details. Successful submission of articles by author(s) for publication clearly implies that the work is not an infringement of any existing copyright warranty as JOGA reserves the right to be indemnified by the author(s) where any breach of such warranty is proven. For ease of dissemination and to ensure proper policing of use, papers and contributions become the legal copyright of JOGA once published unless otherwise agreed.
Permission clearance should be obtained by the author(s) where applicable for the use of any content of interest not originally created by them. This must be done before the submission of the article to JOGA. Failure to do so may lead to a lengthy delay in publication, as JOGA is unable to publish any article which has permissions pending. Thus, the rights JOGA requires are:
- Non-exclusive right to reproduce the material in the article or book chapters.
- Print and electronic rights.
- To use the material for the life of the work (for instance, there should be no time restrictions on the re-use of material).
Where tables, figures or excerpts of more than 250 words are reproduced from another source, it is expected that:
- Author(s) should obtain the necessary written permission in advance from any third-party owner of the copyright for the use in print and electronic formats of any of their text, illustrations, graphics, or other material in their manuscript. Permission must also be cleared for any minor adaptations of any work not originally created by the author(s). The author (s) should not assume that any content freely available on the web is free to use.
- Where the author adapts a significant number of any material, the author(s) must inform the copyright holder of the original work.
- Author obtains any proof of consent statements
- The author must acknowledge figure(s) and content adopted or adapted in work utilizing source(s) and further capture them in the list of references.
