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

Keywords: {'name': 'Capital Adequacy Profitability Authorized International DMBs Efficiecny of Management'}

Authors & affiliations

Nenubari Ikue John
Affiliation not supplied

Emeka Nkoro
Affiliation not supplied

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