PRUDENTIAL GUIDELINES AND DEPOSIT MONEY BANKS PERFORMANCE IN NIGERIA

Abstract

This study is on prudential guidelines and deposit money banks’ performance in Nigeria. It
specifically examined effect of bank financial strengthen and ratios in terms of asset quality,
capital adequacy, liquidity, leverage and bank size on bank performance in Nigeria. It is a
longitudinal study covering a time frame of five (5) years (2011-2015). Historical data was
obtained from the financial statements and accounts of twelve (12) sampled banks selected
through purposive sampling technique. Data was analysed using descriptive statistics and
statistical tool, panel least square (PLS) regression. The diagnostics test consisted of JacqueBera test for checking for normality, Pearson correlations for the purpose of checking for the
presence of multicollinearity and Hausman test for the purpose of ascertaining whether to use
fixed or random effect panel least square regression. Data was estimated with computer software
known as E-views 8.0 and statistical package for Social sciences (SPSS) version 21. The study
revealed that Asset quality and leverage have significant effect on bank performance, while
capital adequacy, Liquidity and bank size have no significant effect suggesting that they are
weak determinants but have positive relationship with bank performance in Nigeria. The study
recommended that banks in Nigeria should endeavor to always increase their capital base from
time to time and banks should acquire more assets especially investment securities and noninterest cash from other banks