This study examined the impact of the recapitalisation of deposit money banks on profitability covering a nine-year period from 2008 to 2017. Panel data of 13 Deposit money banks using data obtained from secondary source is used. The study is based on the Buffer theory of capital adequacy, deposit insurance theory and the expense theory. The investigation was in two phases. The pre-estimation involved the descriptive analysis, correlation analysis and variance inflation factor analysis utilised to evaluate the characteristics of the series. In the estimation and model diagnostic phase, the study utilised the Hausman test to determine and select the most appropriate estimating technique amongst the Pooled OLS, fixed effect and random effect analysis.
The model diagnostic test was carried out to determine the appropriateness and exhaustiveness of the model. They are the heteroskedasticity,
Cross dependence, the Serial correlation and Autocorrelation tests. The result showed that recapitalization and exchange rates significantly and positively influenced the profitability performance of listed Deposit Money Banks in Nigeria.
The study recommended that current level of 25 Billion Naira should be raised in order to enhance the operational capacity of the Deposit money banks. This is in addition to intensification of technology-driven service delivery.