Relationship between ownership concentration and financial performance of deposit money banks in Nigeria: Does a turning point exist? (original) (raw)
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This study investigated the effect of ownership concentration on the performance of the Nigerian banking sector for the period of 2008 to 2014.The study employed a sample of 5 major commercial banks in Nigeria selected on the bases of size. The data for the study was generated from the annual report of each of the banks under study for the period covered. We employed pooled panel data regression analysis to empirically evaluate the data. Both accounting and market based performance were employed with ROA and ROE as the key variable to proxy accounting based performance while EVA were used for market based performance. The result of the pooled panel data analysis reveals that ownership concentration has positive but insignificant effect on both the accounting and market based performance measures employed in the model. On the same vain, firm size which was used as a control variable has a positive and significant effect on both accounting and market based measure of banks performance. We therefor recommend that as concentrated owners seek to increase their interest, appropriate legal and control measures should be put in place to ensure that major owners don't control the banks to their own advantage and to the expense of minority shareholders and the public at large.
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 loan quality of deposit money banks in Nigeria
Journal of Islamic Accounting and Finance Research, 2021
Purpose - This study examined the effect of Ownership Structure (Management Shareholding and Ownership Concentration) on the loan quality (LDR) of banks in Nigeria for a period of 10 years (2008-2017). The study utilized data extracted from the annual reports of the fourteen (14) studied banks.Method - Robustness tests were carried out to determine: the existence or otherwise of multi-collinearity, fitness of the model and appropriate regression analysis for the study. Descriptive statistics, correlation and Fixed Effect GLS regression were used to describe and analyze the data.Result - The study found that, ownership structure (ownership concentration and management shareholding) has significant negative effect on loan quality of banks in Nigeria.Implication - The implications of this research is that increased ownership concentration as well as management shareholding can strengthen banks’ loan quality owing to reduced proportion of depositors funds used to finance loan. This coul...
AFIT Journal of Accounting research, 2021
Deteriorating asset quality was a permanent characteristic of banking institutions in Nigeria. This was not unconnected with weak credit policies and practices, insider abuses and unstable macroeconomic environment.This study assesses Moderating effect of Managerial Ownership Structure on the relationship between Assets Quality and Financial Performance of Listed Deposit Money Banks in Nigeria for the period of 2011-2019. The population of the study is fifteen (13) listed deposit money banks in Nigeria. Assets Quality analyses as the independent variable was proxy with Non-Performing Loan, Loan Growth rate, Loan Loss and return on asset was used to proxy financial performance, while Managerial ownership structure as the Moderating Variable. Data were collected from secondary source through the annual reports of the banks for the period under study and the data was analysed using multiple panel regression techniques. The findings reveal that Managerial ownership structure has a positive and significant effect on financial performance, while the non-performing loan has a significant negative relationship with financial performance respectively. This study concluded the interaction between managerial ownership structure and financial performance was found to be positive and significantly influencing financial performance. This means that managerial ownership structure can control the financial performance of banks, it is recommended among others, Managerial shareholders shouldn't be part of credit committee that issue out loan to customers. Furthermore, the banks should effectively review and implement management risk framework in order to reduce the proportion of non-performing loan attributed to listed deposit money banks in Nigeria
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...
OWNERSHIP STRUCTURE REFORM AND BANK PERFORMANCE IN NIGERIA
Nigeria undertook a major bank structure reform between 2004 and 2006. A pivotal plank of that reform was the pegging of government ownership in deposit money banks to 10%. This was informed by the general economic theory that state ownership in commercial undertakings hurts operating performance. This paper anayzes the implications of this reform on operating performance of banks in Nigeria. Results from descriptive statistics indicate that government ownership in Nigerian banks is about 4%; 6% > the limit prescribed by the Central Bank of Nigeria. The coefficient of government ownership is not only rightly signed but also statistically significant. With a coefficient of -0.0568, the results confirm theoretical conclusion that government ownership hurts operating performance. The results support the outcome of the Nigerian study of Thorsten B. et al (2003) who assessed the effect of privatization on bank performance in Nigeria over the period 1990-2001. The result further provides an empirical answer to a question recently posed by the governor of the Central Bank of Nigeria – does ownership of financial institution matter? It appears that in a normal environment government shareholding of financial institutions should be limited as far as possible because of the tendency of government to stifle performance through suboptimal investment decisions, frequently on political expediency other than economic consideration.
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.
EFFECT OF BOARD SIZE AND OWNERSHIP STRUCTURE ON DEPOSIT MONEY BANKS FINANCIAL PERFORMANCE IN NIGERIA
s The study explores the effect of Board Size and Ownership Structure attributes of corporate governance on financial performance of Deposit Money Banks (DMB) financial performance in Nigeria. Panel Data were collected from the published Annual Reports of 16 quoted/listed DMB in Nigeria for the period 2011-2015. Operationalizing Return on Assets (ROA) and Return on Capital Employed (ROCE) as the dependent variables while Board Size and Ownership Structure are the independent variables. The study discovered that board size has a negative effect on both ROA and ROCE though not statistically significant and the other dependent variable of ownership structure indicate a positive effect on ROA and a negative effect on ROCE. The study therefore, recommends that regulators to developed, consolidate and review as the need arises, a robust and all-inclusive corporate governance framework.
Bank Size and Financial performance of Deposit Money Banks in Nigeria
This study investigated corporate size and financial performance of deposit money banks in Nigeria for the period 2010 to 2019. The study employed ex post facto and correlational research design and the population comprised of all banks listed on the Nigerian Stock Exchange for the period under review. The sample consisted of ten (10) banks after data filtration using simple random sampling technique. The study collected data from secondary sources mostly the sampled banks financial statements and Central Bank of Nigeria Statistical Bulletin. The secondary data obtained was analysed with descriptive and inferential statistics. The inferential statistics employed multiple regression analysis (parsimonious error correction model). The result showed a positive and significant relationship between bank size and return on assets of deposit money banks in Nigeria. The paper concluded that banks size positively influences the financial performance of deposit money banks. Therefore, the paper recommended amongst others that deposit money banks in Nigeria should improve their assets and level of capitalization so as to improve their lending capability and hence financial performance.