Ownership Structure and Financial Performance: Evidence from Nigerian Commercial Banks

This study examined Ownership Structure and Financial Performance: Evidence from Nigerian Commercial Banks. The target population for this study is all commercial banks licensed and regulated by the Central Bank of Nigeria (CBN). Secondary data were collected from audited annual financial statements and the Central Bank of Nigeria (CBN) annual banking supervision reports covering 15 listed commercial banks on the Nigerian Stock Exchange (NGX). This study employs panel data regression analysis. Four ownership structure dimensions state ownership, managerial ownership, institutional ownership, and foreign ownership were examined against four financial performance measures: return on assets (ROA), return on equity (ROE), net interest margin (NIM), and earnings per share (EPS). Panel data regression analysis was employed, with Hausman test results guiding the choice between fixed and random effects models. The findings reveal state ownership was found to negatively and significantly relate to net interest margin. Managerial ownership showed a negative association with both NIM and EPS. Institutional ownership negatively influenced ROA and foreign ownership exhibited a negative relationship with EPS. The study recommended that Regulatory authorities such as the Central Bank of Nigeria should encourage a reduction in excessive state ownership in commercial banks, as government dominance may lead to political interference, inefficiency, and weak profit orientation and Banks should reassess managerial ownership structures by limiting excessive insider shareholding, since managerial entrenchment can weaken accountability and reduce performance and The CBN should develop a comprehensive foreign ownership policy framework that balances the benefits of foreign capital and expertise with the need to protect domestic shareholder interests and ensure that earnings are not systematically repatriated at the expense of per-share value creation.