Title: Firm characteristics and financial performance of listed deposit money banks in Nigeria

Authors: Wisdom Okere; John Okoye Nonso; Njogo Bibiana; Sharon Uke; Cynthia Okere

Addresses: Department of Economics, Accounting and Finance, Bells University of Technology, P.M.B 1015, Ota, Ogun State, Nigeria ' Department of Banking and Finance, Nnamdi Azikiwe University, PMB 5025, Awka, Anambra State, Nigeria ' Department of Economics, Accounting and Finance, Bells University of Technology, P.M.B 1015, Ota, Ogun State, Nigeria ' Department of Economics, Accounting and Finance, Bells University of Technology, P.M.B 1015, Ota, Ogun State, Nigeria ' Department of Economics, Accounting and Finance, Bells University of Technology, P.M.B 1015, Ota, Ogun State, Nigeria

Abstract: This study examined the effect of firm characteristics on the financial performance of listed deposit money banks in Nigeria. The study used panel ordinary least squares regression and findings show that there is a positive insignificant association between capital adequacy and return on assets. In addition, there is a negative insignificant relationship between board size and return on assets. Based on findings, this study recommends that deposit money banks should keep their capital adequacy ratio (CAR) above the minimum requirement set by the regulator because banks with high CAR are perceived to be more stable, efficient, safe and likely to meet their financial obligations. This would improve the confidence of investors and customers, therefore, leading to a positive effect on overall bank performance. Furthermore, the study recommends that having a smaller board size reduces agency problems within the firm; making the board more effective promotes improved financial performance.

Keywords: capital adequacy; board size; return on asset; deposit money banks; board characteristics.

DOI: 10.1504/AJFA.2024.141559

American Journal of Finance and Accounting, 2024 Vol.8 No.2, pp.150 - 163

Received: 05 Sep 2023
Accepted: 02 May 2024
Published online: 23 Sep 2024 *

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