Journal of Accounting and Financial Management (JAFM )

E-ISSN 2504-8856
P-ISSN 2695-2211
VOL. 10 NO. 9 2024
DOI: 10.56201/jafm.v10.no9.2024.pg137.156


Effect of Recapitalisation on Capital Adequacy of Quoted Deposit Money Bank in Nigeria

Professor Ambrose A. Okwoli, Dr. (Mrs) Saratu L. Jim-Suleiman and Dr. Godfrey Datong Daboer


Abstract


The objective of this study was to empirically examine the effect of bank recapitalization on capital adequacy of quoted Deposit Money Banks in Nigeria with the aim of finding out weather it has enhanced the capital adequacy of the banks or not. Relevant literatures were reviewed. The study adopted causal research design and data were sourced secondarily from Nigerian Deposit Insurance Corporation (NDIC) annual reports, Banking supervision annual reports in Nigeria. The data were analysed using pooled regression analysis through STATA Window 14 package. The findings of this study indicate that recapitalization has a significant increase on capital adequacy of quoted deposit money Banks in Nigeria. In other words, recapitalization has the incentive to boost the capital adequacy of Deposit Money Banks in Nigeria. The implication of this finding is that recapitalization has made the banks have adequate capital which covered their fixed assets and are able to absorb losses arising from operation cost and that adequate capital can serve as an impetus in fortifying the performance of the Deposit money Banks in Nigeria. It is therefore recommended that capital based of Deposit Money Banks in Nigeria should be based on inflation rate, that is when inflation rate is high the need to increase capital base arise.


keywords:

Recapitalization, shareholders’ fund, capital adequacy, Deposit Money Bank and


References:


Abdullahi, I.B. (2007). Banking Sector Recapitalisations and Bank consolidation in Nigeria:
Challenges and prospects. Business journal of management and social Sciences 6(1),
116-125
Abdulraheem, A. (2006). Economic and political challenges of Banking Recapitalisation. in
Democracy and Development in Nigeria(Ed) Vol.2. Lagos: Concept publication.
Adaju, S. (2007) world class. Tell magazine May
Adedipe, D.O. (2005). Banking System recapitalisations and challenges. A Bullion
publication of Central Bank of Nigeria 29(4).
Adegbaju, A.A.,& Olokoyo, F. O. (2008). Recapitalisation and Banks’ performance: A case
study of Nigerian Bank. African Economics and Business Review 6(1). 1-17.
Adeyemi. B. (2011). Bank Failure in Nigeria: A consequence of Capital Adequacy, Lack of
transparency and non-performing loans. Bank System 6(1), 99-109.
Ajayi, M. (2005). Banking Sector Recapitalisations and bank Consolidation: Conceptual
framework.A Bulion Publication of the CBN 29 (2), 2-15.
AlaJekwu, U. B. & Obialor, M. C. (2014). Nigerian bank recapitalisationeffect on the Banks
and the Economy (2000-2012). International Journal of managerial studies and
Research (IJSR) 2(2)., 48-56.
Aminu, A. (2004, July 30). Banks rush to beat deadline on recapitalisation. Thisday P. 12.
Aspal, P.K.,& Nazneen, A. (2014). An empirical analysis of capital adequacy in the India n
private Sector banks.American Journal of research Communication, 2(11), 28 – 42.
Bakare, A. S (2011). The trend and growth implication of bank recapitalisation in Nigeria.
African Journal of Business Management, 5(14), 5938-5945.
Boyd, J.H.,& Champ, B. (2003) Inflation and financial market performance: what have we
learned in the last ten years. Federal Reserve Bank of Cleveland. 03-17.
Boyd, J.H., Levine, R.,& Smith, B.D. (2001). The impact of inflation on financial sector
performance. Journal of monitory economics. 47(2) 221-248
Calem, P.S.; & Rob, R (1996). The impact of capital-Based regulation on bank risk taking: A
dynamic model, board of governors of the Federal Reserve System,” Finance and
Economics Discussion series 96/12 (february), 36.
Central Bank of Nigeria banking supervision Annual Report (2005), Abuja. CBN.
Dang, U. (2011). The CAMEL rating system in banking supervision. A case of study.
Dissertation Arcada University of Applied Science, International Business. Available
at: http://www.studymode.com./essays/camel-Rating-in-Banking-17376.html.
De- Nicolo, G. (2003). Bank Consolidation, International and Conglomeration: Trends and
Implications for Financial risk. IMF working Paper, 3,158.
Dike, O. (2006, January 16). The wheat, the chaff. Newswatch Business, P. 15
Ebhodaghe, J.U. (1991). Bank Deposit Insurance Scheme in Nigeria. NDIC Quarterly 1 (2),
17-25.
Ejoh, N.O., & Sackey, J.A (2012). The impact of market share on Deposit money bank’s
earningsin Nigeria. European Journal of Business management 6(19), 81-89.
Ezegbu, T. (2004, July 25). Capitalisation. The Punch, P. 16
Hardy, D.C.,& Bonaccorsi di Patti, E (2001). Bank recapitalisation and bank efficiency in
Pakistan. IMF working paper WP/101/138 middle Eastern Department.
Ikpefan, O.A. (2013). The impact of Bank recapitalisation on the performance of Nigerian
Banking Industry (1986-2006). The Journal of Commerce 4(1). 24-39
Ikpefan, O.A., Okorie, U.E., Agwu, M.E.,& Achugamonu, B.U (2014). Bank capitalization
and cost of equity on earningsof Nigerian Deposit money Banks. General management
Approach. International Review management and Business Research 3(4), 1928 –
Jacobson, T., Linde, J.,& Roszbach, K. (2002). The IRB Approach in the Basel Committee’s
proposal for new capital adequacy rules. Some simulation – based illustrations.
Economics Review 4, 35-72.
Jeff, L. (1990) Capital adequacy. The bench mark of the 1990s. Bankers Magazine 173(1),
14-18.
Kamin, S.B.,& Rodger, J.H. (2000). Output and the real exchange rate in developing
economics: An application to Mexico. Journal of Development Economics 8(2), 167-
184
Kenn – Ndubuisi, J.I.,& Akani, H.W (2015). Effects of recapitalisation on commercial banks
survival in Nigeria: Pre and post CAMEL analysis.European journal of Accounting,
Auditing and finance Research 3(9), 12 – 30.
Kitthinji, A.M. (2010). Credit risk management and earningsof commercial banks in Kenya.
school of Business Nairobi. University of Nairobi, Kenya.
Kosmidou, K. (2008). The determinants of banks’ profits in Greece during the period of EU
financial integration. Managerial Finance 34 (3), 146-159.
Ningi, S.I.,& Dutse, A.Y (2008). The Impact of Banking consolidation strategy on Nigerian
economy. African Economic and Business Review 6(2). 26-45.
Njanike, K. (2009). The impact of Effective credit Management on Bank Survival. Annals of
University of Petrosani, Economics 9(2). 173-184.
Nwankwo, G.O. (1991). Bank Management Principles Lagos: Malthouse and practice press
Ltd.
Nwude, O. (2015). Bank Recapitalisation: The imperative, implications, Options and strategies
for banks. The Nigerian Bankers Lagos. The CIBN Press Ltd.
Obiechino, M.E. (2010). Capital flows and financial crisis: Policy issues and challenges for
Nigeria. Central bank of Nigeria Economic and financial review 48(1).
Odufu, I.I. (2005). Challenges of Banking Sector and Bank consolidation in Nigeria in Banking
Sector recapitalisations and Bank Consolidation in Nigeria,Publication of Central Bank
of Nigeria 29(2).
Ojo, A.T. (2010). The Nigerian Maladapted Financial System: Recapitalisationing tasks and
Development Dilemma. Lagos: CIBN Press Ltd, 277-278
Ojong, C.M., Ekpuk, A., Ogar, A.,& Emori, E.G (2004). Banking Sector Recapitalisation in
Nigeria: A Regulatory Imperative for a sustainable Banking Industry. Research Journal
of Finance and Accounting. 5(13). 166-189
Oke, O.A. (2006). Banking Consolidation in Nigeria and Strategies for generating better
Returns. Search Wap.com, Wednesday, June 28th, 2006
Okpanachi, J. (2011). Comparative analysis of the impact of mergers and acquisitions of
financial efficiency of banks in Nigeria. Journal of Accounting and Taxation. 3(1), 1-
Omoruyi, S.E. (1991). The financial Sector in Africa: Overview and Recapitalisations in
Economic Adjustment Programmes. CBN Economic and financial Review29(2), 110-
Sani, J.,& Alani, G.O. (2013). A comparative analysis of pre and post recapitalisation financial
performance of Banks in Nigeria. International journal of capacity building in
Education and management (IJCBEM) 2(1), 79 -90.
Sanusi, S.L. (2010, February). The Nigerian Banking industry: What went wrong and the way
forward Being the full text of a Convocation Lecture delivered at the convocation
square, Bayero University Kano, Kano state
Sanusi, S.L. (2012, February). Banking Recapitalisation and its impact on the Nigerian
Economy. Being a lecture delivered at the University of Warwick’s Economic Summit,
U.K.
Sanusi, S.L. (2012, November). Growth prospects for the Nigerian economy. Being paper
presented at the Igbinendion University Eighth convocation ceremony, Okada, Edo
state.
Sokefun, A.O. (2011). Customer Service and its effectiveness on the Banking business in
Nigeria. Retrieved from www. Franscampus.org, www. Ajol.info/Journals/Jorind.
Soludo, C.C. (2005, November). Consolidating of Nigeria’s banking industry. Central bank
of Nigeria Fourth annual monetary policy Conference proceeding Abuja, Federal
Capital Territory
Spong, K. (1990). Banking regulations: Its purposes, implementations and effects. (3rd ed.)
Kansas: Federal Reserve Bank of Kansas City, U.S.A.
Wilson, I. (2006). Regulatory and institutional challenges of corporate governance in Nigeria
post banking Consolidation. Nigerian Economic Submit Group (NESG) Economic
Indicators, 12 (2), 1-2.
Yauri, N. M., Muhammad, K.,& Kaoje, N.A. (2012). Bank R


DOWNLOAD PDF

Back