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Capital Structure and Financial Performance in Nigeria

Author

Listed:
  • Julius B. Adesina

    (Caleb University, Imota, Lagos Nigeria, Corresponding Author;)

  • Barine M. Nwidobie

    (Caleb University, Imota, Lagos, Nigeria.)

  • Oluwatosin O. Adesina

    (Obafemi Awolowo University, Ile Ife, Nigeria.)

Abstract

Capital structure has been found to have impact on firm performance. Bank consolidation in Nigeria has increased bank equity capital against debt. This study aims to determine the impact of post-consolidation capital structure on the financial performance of Nigeria quoted banks. The study used profit before tax as a dependent variable and two capital structure variables (equity and debt) as independent variables. The sample for the study consists of ten (10) Nigerian banks quoted on the Nigerian Stock exchange (NSE) and period of eight (8) years from 2005 to 2012. The required data and information for the study were gathered from published annual reports. Ordinary least square regression analysis of secondary data shows that capital structure has a significant positive relationship with the financial performance of Nigeria quoted banks. This suggests that the management of quoted banks in Nigeria consistently use debt and equity capital in financing to improve earnings.

Suggested Citation

  • Julius B. Adesina & Barine M. Nwidobie & Oluwatosin O. Adesina, 2015. "Capital Structure and Financial Performance in Nigeria," International Journal of Business and Social Research, LAR Center Press, vol. 5(2), pages 21-31, February.
    • Handle: RePEc:lrc:larijb:v:5:y:2015:i:2:p:21-31
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    3. Evans Akomeah & Paula Bentil & Alhassan Musah, 2018. "The Impact of Capital Structure Decisions on Firm Performance: The Case of Listed Non-Financial Institutions in Ghana," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 8(4), pages 1-15, October.
    4. Usman Suleiman & Abiodun Popoola, PhD & Adabenege Onipe Yahaya, PhD, 2022. "Equity Financing and Financial performance of Listed Deposit Money Banks in Nigeria," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 6(12), pages 619-624, December.
    5. James Obilikwu, 2018. "The Imact of Capital, Concentration, Size and Liquidity on Banking Industry Performance in Nigeria," International Journal of Economics and Financial Issues, Econjournals, vol. 8(4), pages 54-60.
    6. Anh-Huyen Vu Thi & The-Dong Phung, 2021. "Capital Structure, Working Capital, and Governance Quality Affect the Financial Performance of Small and Medium Enterprises in Taiwan," JRFM, MDPI, vol. 14(8), pages 1-13, August.
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    10. Lukman Adebayo Oke & Daud Omotosho Saheed & Yusuf Olamilekan Quadri, 2019. "An Empirical Analysis Of Corporate Capital Structure And Financial Performance Of Listed Conglomerates In Nigeria," Copernican Journal of Finance & Accounting, Uniwersytet Mikolaja Kopernika, vol. 8(3), pages 95-114.
    11. Hwerien Rosemary Idamoyibo, 2024. "Financial Structure and Corporate Profitability of Firms in Nigeria: Does Firm Age Act as a Moderator?," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(7), pages 2259-2271, July.
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    More about this item

    Keywords

    Capital structure; debt and equity; financial performance.;
    All these keywords.

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • M2 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics

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