Effect of Ownership Structure on Financial Performance of Listed Deposit Money Banks in Nigeria

Abstract

In an environment characterized by imperfect information, a variance in the interest between management and shareholders can lead to sub-optimal management decisions. The study is an assessment of the effect of ownership structure on financial performance of listed deposit money banking Nigeria. The expo-facto research design was adopted with reliance on secondary data from annual report of listed firms. The purposive sampling techniques was employed in selecting the 13 firms out of 15 deposit money bank in Nigeria for 2011-2020 financial year. To carry out this objective panel regression estimation was used which is fixed effect by Hausman test which was analyzed using E-views 10. The finding shows that managerial ownership and institutional ownership has positive significant effect on capital adequacy of deposit money bank in Nigeria. The study concludes that managerial ownership and institutional ownership has a significantly positive effect on financial performance and substantially increase the performance of listed deposit money bank in Nigeria. The study recommends that financial regulatory bodies in Nigeria such as the Central Bank of Nigeria (CBN), Nigeria Deposit Insurance Corporation (NDIC), and Securities and Exchange Commission (SEC) should ensure that a reasonable degree of ownership concentration is maintained by all banks due to its potential benefit in improving financial performance in Nigerian banks