KEY ACCOUNTING RATIOS AND THE SHARE PRICES OF LISTED COMMERCIAL BANKS IN NIGERIA (2010-2023)

Agbo, Elias Igwebuike and ODO, John Onyemaechi (2024) KEY ACCOUNTING RATIOS AND THE SHARE PRICES OF LISTED COMMERCIAL BANKS IN NIGERIA (2010-2023). Research Journal of Accounting and Finance (RJAF), 12 (3). pp. 1-24. ISSN 2995-0910

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Abstract

Identifying what determines the share prices of commercial banks can generate important practical and policy implications owing to the part that they play in financing in the economy. The basic valuation of the stocks of quoted deposit money banks, using key financial ratios will disclose the banks’ readiness to make healthy loans, receive interest and fees on other accounts and reduce counterparty risks. This study examined the effect of some key accounting ratios, including return on average equity, return on average assets, net interest margin and liquidity ratio, on the stock price of quoted commercial banks in Nigeria during2010 to 2022. It employed ex-post facto research paradigm as well as the fixed effect model of pooled regression analysis. First Bank, Zenith Bank, Access Bank, UBA, Guarantee Trust Bank and Fidelity Bank constituted the study sample. Findings indicate that, while return on equity has a positive and strong impact and net interest margin has positive but weak impact, both return on average assets and liquidity ratio have negative and non significant impacts on the stock prices of deposit-money banks in Nigeria. This implies that return on average equity is a strong driver of share prices in the Nigerian commercial banks. To boost the stock prices of their commercial banks, therefore, bank executives in Nigeria are advised to engage in activities that would enhance their banks’ return on equity.

Item Type: Article
Subjects: H Social Sciences > HG Finance
Divisions: Faculty of Management and Social Sciences
Depositing User: mrs chioma hannah
Date Deposited: 30 Mar 2025 11:32
Last Modified: 30 Mar 2025 11:32
URI: http://eprints.gouni.edu.ng/id/eprint/4451

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