IDEAS home Printed from https://ideas.repec.org/a/eco/journ1/v16y2026i2id22937.html

The Effect of Capital Structure on Firm Performance in the South African Banking Sector over the Past Decade

Author

Listed:
  • Patel, Shazia

    (University of Cape Town, South Africa)

  • Brijlal, Pradeep

    (University of Cape Town, South Africa)

Abstract

This paper examines the relationship between capital structure and firm performance, specifically focusing on 13 major South African banks within the Financial 15 (FINI 15) Index between 2013 and 2022. The objectives include analyzing capital structure dynamics using debt-to-equity ratios, examining the relationship between capital structure indicators of long-term debt, short-term debt, and total debt and firm accounting performance metrics of return on equity (ROE) and return on assets (ROA), and interpreting the results through prominent capital structure theories, including the trade-off and pecking order theories. The key results show no statistically significant relationship between capital structure indicators and profitability metrics, suggesting factors beyond leverage policy drive performance. The research is significant for providing empirical evidence on major South African banks and for addressing a gap in the literature. The results offer practical implications for bank executives, policymakers, shareholders, and investors when evaluating financing decisions and performance objectives.

Suggested Citation

  • Patel, Shazia & Brijlal, Pradeep, 2026. "The Effect of Capital Structure on Firm Performance in the South African Banking Sector over the Past Decade," International Journal of Economics and Financial Issues, Econjournals, vol. 16(2), pages 140-148, March.
    • Handle: RePEc:eco:journ1:v:16:y:2026:i:2:id:22937
    DOI: 10.32479/ijefi.22937
    as

    Download full text from publisher

    File URL: https://econjournals.com/index.php/ijefi/article/download/22937/10012
    Download Restriction: no
    File URL: https://libkey.io/10.32479/ijefi.22937?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eco:journ1:v:16:y:2026:i:2:id:22937. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Monica Sinhat (email available below). General contact details of provider: https://econjournals.com/index.php/ijefi .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.