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How is Size Related to Profitability? Post-Consolidation Evidence from Selected Banks in Nigeria

Author

Listed:
  • Funso T. Kolapo

    (Department of Banking and Finance, Ekiti State University)

  • Lawrence B. Ajayi

    (Department of Banking and Finance, Ekiti State University)

  • Olufemi A. Aluko

    (Department of Finance,University of Ilorin, Ilorin)

Abstract

It is theoretically believed that increase in firm size would resultto increase in firm profitability. Therefore, this study examines the relationship between size and profitabilityof six banks in Nigeria after the 2005 consolidation exercise. The measure of profitabilityis return on assets. Employing the static panel data regressionmethod, the study found that size has an insignificant negative relationship with bank profitability. Thisstudy concludes that the 2005 consolidation exercise did not enhancetheprofitabilityof the selected banks.

Suggested Citation

  • Funso T. Kolapo & Lawrence B. Ajayi & Olufemi A. Aluko, 2016. "How is Size Related to Profitability? Post-Consolidation Evidence from Selected Banks in Nigeria," International Journal of Finance & Banking Studies, Center for the Strategic Studies in Business and Finance, vol. 5(4), pages 30-38, July.
    • Handle: RePEc:rbs:ijfbss:v:5:y:2016:i:4:p:30-38
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    References listed on IDEAS

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    Cited by:

    1. Serhat Yüksel & Shahriyar Mukhtarov & Elvin Mammadov & Mustafa Özsarı, 2018. "Determinants of Profitability in the Banking Sector: An Analysis of Post-Soviet Countries," Economies, MDPI, vol. 6(3), pages 1-15, July.
    2. Clement Olalekan Olaniyi & Titus Ayobami Ojeyinka & Xuan Vinh Vo & Mamdouh Abdulaziz Saleh Al‐Faryan, 2023. "Do business strategies vary across firms in the banking industry? New perspectives from the bank size–profitability nexus," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(1), pages 525-544, January.
    3. Ayobami Ojeyinka, Titus & Enisan Akinlo, Anthony, 2021. "Does Bank Size Affect Efficiency? Evidence From Commercial Banks In Nigeria," Ilorin Journal of Economic Policy, Department of Economics, University of Ilorin, vol. 8(1), pages 79-100, June.

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