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. 11 NO. 2 2025
DOI: 10.56201/ijbfr.vol.11.no2.2025.pg26.53

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Capital Adequacy Ratios and Real Sector Investment of Quoted Commercial Banks in Nigeria

LENYIE, Leesi

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Abstract

This study examined the effect of capital adequacy ratios and real sector investment of quoted commercial banks in Nigeria. The objective was to study how capital adequacy ratios affect real investment of quoted commercial banks. Cross sectional data were sourced from financial statements of the quoted 15 commercial banks. Multiple regression were formulated having real sector investment as dependent variable while Tier one capital ratio, Tier two capital ratio, Capital to deposit ratio and Capital to risk assets ratio. Statistical Package for Social Sciences SPSS version 25 was used to analyze the quantitative data and test their reliability. The study found that 0.05 significance level, Tier one capital has positive but no significant effect on real sector investment of the quoted commercial banks (? = . 1.683, t = 1.168, p = . 266). Tier two capital has positive but no significant effect on real sector investment of the quoted commercial banks (? =.370, t = 1.398, p = .187). Capital to total loans has positive and significant effect on real sector investment of the quoted commercial banks (? =..446, t = 1.981, p = .041). Capital to total deposit has positive but no significant effect on real sector investment of the quoted commercial banks (? =.18.525t = 1.463, p = .169). From the findings, the probability value corresponding to Tier one capital adequacy ratio .215 greater than 0.05, the study conclude that Tier one capital ratio has no significant effect on real sector investment of quoted commercial banks in Nigeria. The probability value corresponding to Tier two capital adequacy ratio .259 greater than 0.05, the study conclude that Tier two capital ratio has no significant effect on real sector investment. From the findings, the probability value corresponding to capital to total loan capital adequacy ratio .041 less than 0.05, the study conclude that Capital to deposit ratio has significant effect on real sector i

keywords:

Capital adequacy ratios, Real sector investment, Commercial banks, Nigeria

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