EFFECT OF CAPITAL ADEQUACY ON COMMERCIAL BANK’S FINANCIAL PERFORMANCE IN NIGERIA, 2010-2017

Nwankwo, S.N.P (2019) EFFECT OF CAPITAL ADEQUACY ON COMMERCIAL BANK’S FINANCIAL PERFORMANCE IN NIGERIA, 2010-2017. European Journal of Accounting, Finance and Investment, 5 (4). pp. 1-21. ISSN 3466-7037

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Abstract

This study investigated the effect of capital adequacy on Commercial Bank ‘s financial performance in Nigeria. The research was an x -post facto research design which made use of secondary data covering the period of 2010-2017. Descriptive statistics was employed to check the trends, linearity or otherwise of the data. Regression model was applied in determining the extent of the effects exerted on Commercial Bonk Financial performance by Loans and Advances, Owners ‘ Equity and Total Deposits of commercial banks in Nigeria. The main theory that underpinned the research is the; “Liquidity Theory “. The result of the analysis shows that Owner’s equity (OE has positive and no significant impact on Net interest Income (Nil) of Commercial Banks in Nigeria. This study also confirmed that Loans and Advances had a positive and significant relationship with Net Interest Income of Commercial Banks in Nigeria. The study further show that Total Deposits had negative and no significant effect on Net Interest Income of Commercial banks in Nigeria. In the light of above findings, the study concluded that loans and advances are the important and positive predictor of commercial Bank financial performance measured in terms of Net interest income. The study therefore recommended that management of Commercial Banks in Nigeria should adhere strictly to the provisions of the prudential guidelines in reviewing and reporting bank financial performance, particular/i’ in the areas of credit portfolio classification and disclosures, provision for non-performing loan facilities, interest accruals, and classification of other assets and off balance sheet engagement. Key

Item Type: Article
Subjects: H Social Sciences > HG Finance
H Social Sciences > HJ Public Finance
Divisions: Faculty of Management and Social Sciences
Depositing User: mrs chioma hannah
Date Deposited: 23 Sep 2019 12:43
Last Modified: 23 Sep 2019 12:55
URI: http://eprints.gouni.edu.ng/id/eprint/2049

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