EMPIRICAL INVESTIGATION OF IMPACT OF RECAPITALIZATION OF BANKS AS A PREDICATE OF BANK PERFORMANCE: A CASE OF NIGERIA

EMPIRICAL INVESTIGATION OF IMPACT OF RECAPITALIZATION OF BANKS AS A PREDICATE OF BANK PERFORMANCE: A CASE OF NIGERIA

Author by Dr. James .a Oguntodu

Journal/Publisher: International Journal Of Advanced Academic Research

Volume/Edition: 2

Language: English

Pages: 1 - 19

Abstract

Abstract

The failure and weak capital base of the Nigerian banking sector questioned the effectiveness of the sector that is seen as one of the agent of financial stability and economic development in Nigeria. The Central Bank of Nigeria (CBN) recent reform to consolidate the banking sector through drastic increase to N25 billion as a minimum capital base has led to a remarkable reduction in the numbers of banks changed their mode of operation and their contribution to the economy, the research posits further that “Reforms of this nature such as consolidation of banks are one of the ways to improve the banking sector for financial stability and sustainable development. The dependent variable used was bank profitability while the independent variables were Return on Assets (ROA), Return on Equity (ROE), Non- performing loans (NPL), the purpose of this study was to find out the effect of recapitalization on the composition of banks in Nigeria, the varying level of bank profitability since 2008, the significant relationship between recapitalization and bank profitability, and the extent at which recapitalization has affected the banking sector. At the end of the research it was discovered that since the onset of recapitalization bank profitability has been on a persistent increase and recapitalization had caused greater good than harm in the banking sector.


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