IIARD International Institute of Academic Research and Development

IIARD INTERNATIONAL JOURNAL OF BANKING AND FINANCE RESEARCH (IJBFR )

E-ISSN 2695-1886
P-ISSN 2672-4979
VOL. 10 NO. 7 2024
DOI: 10.56201/ijbfr.v10.no7.2024.pg1.16

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Determinants of Capital Adequacy of Deposit Money Banks Listed on The Nigeria Stock Exchange

Aza, Ibrahim Eyigege

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Abstract

This study investigate the determinants of capital adequacy of deposit money banks listed on the Nigeria stock exchange for the period of ten years spanning from 2013 to 2022 using variables such as profitability, liquidity, leverage and size as explanatory variables and capital adequacy as the predictor variable. The study utilizes an OLS regression analysis with the aid of E-views using descriptive research design. The study found significantly positive effect of profitability and liquidity on capital adequacy. The study also found significantly negative effect of size on capital adequacy while the effect of leverage on capital adequacy is insignificant. The study therefore recommends that deposit money banks should reduce and minimize cost resulting from expansion and growth and should not source for external fund with higher interest rate.

keywords:

Adequacy, Profitability, Explanatory, Predictor, Regression, leverage

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