Dynamics of Capital Adequacy and Profitability of Internationalized Deposit Money Banks in Nigeria

  • NenuBari Ikue-John
  • Emeka Nkoro University of Port Harcourt

Abstract

The study examines the dynamic responses of profitability indexes to capital adequacy ratios of authorized internationalized deposit money banks in Nigeria. The data were sourced from the financial yearbooks of the deposit money banks and analyzed with static and dynamic panel estimators. The static estimator shows that the banks have differences in managerial style, size, and profitability. Also, it was revealed that return on asset and return on equity responded positively to asset size, the efficiency of the use of the asset and current ratio in the static models and they were highly significant. However, they were insignificant in the dynamic specifications except for asset size that was significant in the return on asset model showing a weak dynamic response of profitability to capital adequacy ratios. Hence the study recommended that Banks should improve their share based as to increase the asset as this will improve profitability.

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Published
2019-07-23
How to Cite
Ikue-John, N., & Nkoro, E. (2019). Dynamics of Capital Adequacy and Profitability of Internationalized Deposit Money Banks in Nigeria. Bussecon Review of Finance & Banking (2687-2501), 1(1), 18-25. https://doi.org/10.36096/brfb.v1i1.96
Section
Articles