Sanusi Bello (PhD), Stephen Pembi, Vivi Peter Vandi


The aim of this study is to assess the impact of capital structure on the financial performance of deposit money banks in Nigeria. The study adopted an ex-post facto research design and it considers variables Long term debt to Asset(LTD/TA),Short term debt to total Asset (STD/TA) and Total debt to total Asset (TD/TA) of capital structure and financial performance which was proxy by Return on Asset(ROA). The study sourced secondary data using a convenient sampling technique based on the availability of data as at the period of the study. These data were obtained from annual financial report of the five sampled Deposit Money Banks in Nigeria covering a period of 2009 -2018. The data obtained were analysed using descriptive statistic (i.e. mean and standard deviation) and inferential statistic (i.e. Pearson correlation and regression analysis). The results of the analysis reveals that STDTA (β= 0.936554, p<0.05) and TDTA (β= 0.310692, p< 0.05) have significant positive impact on ROA. While LTDTA (β= 0.08686, p> 0.05) has insignificant positive impact on ROA. Therefore, the study summarily recommends that stakeholders of, deposit money banks in Nigeria should use more of short term debts portion of capital structure, the manner of utilizing the resources while expanding the banks and the amount of investment on fixed asset to the ratio of short term debt should be given keen considerations. On this note,  investors must pay more attention to the capital structure mix of DMBs  before investing in them.


Asset, Capital structure, debt, deposit money banks, financial performance

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