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Dynamics of capital adequacy and profitability of internationalized deposit money banks in Nigeria

Author

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  • Nenubari Ikue John

    (University of Port Harcourt, Port Harcourt, Rivers State, Nigeria)

  • Emeka Nkoro

    (University of Port Harcourt, Port Harcourt, Rivers State, Nigeria)

Abstract

The study examined 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 year books 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, efficiency of the use of asset and current ratio in the static models and they were highly significant. However, they were insignificant in the dynamic specifications except 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.

Suggested Citation

  • Nenubari Ikue John & Emeka Nkoro, 2019. "Dynamics of capital adequacy and profitability of internationalized deposit money banks in Nigeria," International Journal of Business Ecosystem & Strategy (2687-2293), Bussecon International Academy, vol. 1(4), pages 01-08, October.
    • Handle: RePEc:adi:ijbess:v:1:y:2019:i:4:p:01-08
    DOI: 10.36096/ijbes.v1i4.284
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    References listed on IDEAS

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    8. Olalere Oluwaseyi Ebenezer & Wan Ahmad Wan Bin Omar & Syahida Kamil, 2017. "Bank Specific and Macroeconomic Determinants of Commercial Bank Profitability: Empirical Evidence from Nigeria," International Journal of Finance & Banking Studies, Center for the Strategic Studies in Business and Finance, vol. 6(1), pages 25-38, January.
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    Cited by:

    1. Nenubari Ikue John & Ifeanyichukwu Lucky Amabuike & Joseph Ade Ajaba & John Akin Sodipo & Linus Bamekpari Enegesi, 2020. "Financial system, trade concentration and economic growth in West African Monetary Zone (WAMZ)," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 9(4), pages 426-436, July.
    2. Nenubari John Ikue & Joseph Osaro Denwi & John Akin Sodipo & Linus B. Enegesi, 2022. "Bank-specific performance indicators, macroeconomic variables and capital adequacy of Nigerian banking industry," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 11(6), pages 288-299, September.

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