The Effect of Ownership Concentration on the Performance of Nigerian Banking Industries, An Empirical Investigation (original) (raw)
Related papers
Journal of Emerging Economies and Islamic Research, 2019
This study seeks to establish a non-linear relationship between ownership concentration and financial performance of the listed Deposit Money Banks (DMBs) in Nigeria. The data were extracted from the annual reports and accounts of six (6) sampled DMBs from 2003 to 2014. A panel data regression technique was used to analyse the data collected. The study establishes that the relationship between ownership concentration and the financial performance of listed DMBs in Nigeria changes from negative to positive when the ownership concentration reaches 54.94%. This signifies that the relationship between ownership concentration and financial performance is negative if the concentration is below 54.94%. On the other hand, the relationship is positive if it is concentrated above 54.94%. Hence, it is recommended that the ownership of DMBs should not be concentrated below the cut-off point (54.94%) with the view to earning profits.
Ownership Structure and Corporate Performance of Multinational Banks: Evidence from Nigeria
2018
This study investigated whether a significant relationship exists between ownership concentration and corporate performance of Nigerian multinational banks. The corporate annual reports for the periods 2010-2014 were utilised as the main source of secondary data. In testing the research hypotheses, the study adopted the use of panel least square regression method to analyse the data collected from annual reports of the Nigerian multinational banks. Also, the study made use of correlational research design for testing the expected relationship between the variables. Findings revealed a significant negative relationship between ownership concentration and corporate performance of Nigerian multinational banks. In addition, an insignificant positive impact of foreign ownership on corporate performance exists. We also found a significant negative impact of domestic ownership on corporate performance. The study recommends that Nigerian multinational banks should reduce ownership concentra...
International Journal of Economics and Business, 2019
The ownership structure is defined by distribution of equity with regard to votes and capital as well as the identity of equity owners. This study examined the impact of ownership structure on the financial performance of listed deposit money banks in Nigeria. Employed ordinary least squares (OLS) multiple regression technique of data analysis. The study found that Executive directors, Non-executive directors and institutional ownership have significant impact on ROA and ROE of listed deposit money banks during the period of the study. Moreover, the findings revealed that Executive directors and institutional ownership of listed deposit money banks has a significant negative impact on both ROA and ROE. Lastly, the study found that Non-executive directors’ ownership of listed deposit money banks has a significant positive impact on ROA and ROE. The study recommends that regulators of deposit money banks in Nigeria should make policies that will encourage executive and Non-executive directors’ ownership in the Nigerian banking sector. The study also recommends that the institutional investors should also be encouraged.
International Journal of Economics & Business, 2019
Abstract: The ownership structure is defined by distribution of equity with regard to votes and capital as well as the identity of equity owners. This study examined the impact of ownership structure on the financial performance of listed deposit money banks in Nigeria. Employed ordinary least squares (OLS) multiple regression technique of data analysis. The study found that Executive directors, Non-executive directors and institutional ownership have significant impact on ROA and ROE of listed deposit money banks during the period of the study. Moreover, the findings revealed that Executive directors and institutional ownership of listed deposit money banks has a significant negative impact on both ROA and ROE. Lastly, the study found that Non-executive directors’ ownership of listed deposit money banks has a significant positive impact on ROA and ROE. The study recommends that regulators of deposit money banks in Nigeria should make policies that will encourage executive and Non-executive directors’ ownership in the Nigerian banking sector. The study also recommends that the institutional investors should also be encouraged.
OWNERSHIP STRUCTURE AND PERFORMANCE OF LISTED BANKS IN GHANA
The main purpose of this study involves investigating whether or not any empirical relationship prevails amongst ownership forms and banks’ financial outcomes. Utilizing archival data from 8 listed banks from 2014 to 2018, this study implemented a panel regression method of random effect with the aid of Hausman test to facilitate answering the research questions. The study finds that managerial ownership engenders significant parallel associationship with performance measured with profit before interest and taxation and return on shareholders’ funds. Second, the study learns that banks owned partially by the government and foreign investors suffer substantially from achieving performance with respect to profit before interest and taxation, and return on assets. Lastly, the study makes it known that banks owned by institutions can perform creditably well but the findings lack strong statistical backing. The study recommends that owners of banking institutions should practice a managerial system of ownership, linking compensation to performance, through offering incentive contracts in the form of profit sharing, stock options and performance bonuses. Banks owned by government, institutions and foreign investors are advised to strengthen and implement robust auditing and corporate governance systems so that managerial actions can be supervised and monitored effectively.
Ownership Concentration and Bank Performance: Evidence from MENA Banks
International Journal of Business and Management, 2015
This paper analyzes the impact of ownership concentration on MENA banks' performance over the period 2004-2011. The sample includes 38 commercial banks belonging to ten countries of the MENA region. We use an econometric method that deals with the endogeneity problems that have arisen in the corporate governance literature. We show that ownership concentration is significant in explaining performance differences between MENA banks. Our analysis shows that bank performance depends on the identity of large shareholder. Banks tend to exhibit higher levels of performance if their largest shareholder is foreign. However, we find a negative relationship between state ownership and bank performance.
Ownership concentration and bank pro fi tability
2017
We investigate whether ownership concentration influences bank profitability in a developing country context. We focus on bank ownership concentration measured as the amount of direct equity held by a majority shareholder categorised into: high ownership concentration, moderate ownership concentration and disperse ownership. We find that banks with high ownership concentration have higher return on assets, higher net interest margin and higher recurring earning power while banks with dispersed ownership have lower return on assets but have higher return on equity. Also, higher cost efficiency improves the return on assets of widely-held banks and the return on equity of banks with moderate ownership. The findings have implications. & 2017 Faculty of Commerce and Business Administration, Future University. Production and Hosting by Elsevier B.V. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/). JEL: Code: G3; G34; G31
The Impact of Ownership Concentration on Bank Profitability: Is the Effect Linear or Non-Linear? An Empirical Evidence For Turkey, 2021
In this study, the linear/non-linear impact of ownership concentration (OC) on financial performance was investigated. In this context, the data of 8 deposit banks trading at BIST were analysed with a fixed-effects model over the period 2005-2020. The research study used the return on assets ratio (ROA) and return on equity ratio (ROE) as financial performance indicators. According to the research results, OC had negative linear impacts on both ROA and ROE. These impacts had higher significance in the four largest banks. Moreover, the interaction between OC and bank size is significant because bank size positively affects ROA. Furthermore, the ownership concentration of the banks subject to the study was determined.
Ownership structure and financial performance: Evidence from Kenyan commercial banks
PLOS ONE, 2022
The study examined the relationship between ownership structure and financial performance of commercial banks in Kenya for the period 2009-2020. The data were collected from audited financial statements of 39 commercial banks in Kenya. Regression results found strong evidence on ownership structures in explaining the differences in commercial banks' financial performance. The results established that the greatest influence of ownership structures was on net interest margin at 53.04% and return on assets at 31.37%. Influence of ownership structures was found to be low on return on equity at 3.32% and earnings per share at 2.13%. The results found a negative association between state ownership and net interest margin, negative association between management ownership and both net interest margin and earnings per share, negative association between institutional ownership and return on assets and a negative association between foreign ownership and earnings per share. Based on the findings, commercial banks should vary their ownership structures to boost financial performance. Secondly, banks with high percentage of state ownership should consider partial privatization to improve corporate governance practices. Third, banks should adopt managerial ownership policy limiting the proportion of equity stock on executives to limit their powers in strategic decision making. Fourth, the study proposes a percentage limit on equity stock of an individual institutional investor. Lastly, the study proposes that bank's management to come up with a policy detailing the role and place of foreign investors in strategic decision making to ensure their presence in every decision undertaken by bank managers.
OWNERSHIP CONCENTRATION AND FIRM PERFORMANCE: EVIDENCE FROM THE BANKING SECTOR OF PAKISTAN
International Journal of Management, IT and Engineering (IJMIE) ISSN: 2249-0558 Volume 8, Issue 9, 2018
In this research the researcher investigatedrelationship between ownership concentration and performance, of the banking sector in Pakistan. This study analyzed 19 commercial banks listed in the Pakistan stock exchange (PSX), for a time period of 10 years (2006-2015). The selection of 19 listed commercial banks was of the reason mainly due to fill the financial literature gap of the Pakistani banking sector regarding ownership concentration. Since not enough previous research has been done on the ownership concentration with respect to the Pakistan's banking sector. Furthermore, out of the total 21 listed banks, only 19 were selected due to the availability of data. The study used secondary data on the bank ownership and financial performance. These secondary data was obtained mainly from limited commercial banks financial statements.The ownership concentration was measured with three indicators, percentage of largest shareholder (LSH), percentage of five largest shareholders (FIVELSH) and percentage of ten largest shareholders (TENLSH). The shareholder (LSH), which is measured by the percentage of largest single shareholder of a company, is the narrowest. Firms performance was measured by market based measure Tobin's Q (TQ), and accounting based measures Return on equity (ROE) and Return on assets (ROA). Analysis was done by multiple regression models. The findings were that largest shareholder (LSH) had a statistically significant positive relationship with accounting based performance measure, Return on assets (ROA), whereas the rest of the ownership indicators were insignificant. Furthermore, all the ownership concentration indicators also were in insignificant relationship with the performance measures, Return on equity (ROE) and Tobin's Q (TQ). With understanding the relationship of the ownership concentration with the performance of the commercial banks in Pakistan, the policy makers, management and investors helps them to increase the firm value.