ABSTRACT

This study is set out to investigate on the determinant of financial performance of deposit money banks in Nigeria. The main aim of this study was to ascertain the nature of dominance among the selected deposit money banks in Nigeria, by employing various indicators such as return on assets, return on equity, credit risk, interest margin, liquidity ratio as well as bank size.

The data from this study was sourced from the audited financial statements of various sampled quoted deposit money banks within the scope of the study, 2010-2019. The study adopted a pair-wise correlation analysis for all the series employed, other preliminary tests like descriptive statistics, correlation analysis, while the main estimation results from the stochastic dominance analysis were also presented for relevant policy considerations.

The findings of the study revealed that liquidity ratio has a positive impact on deposit money bank, while return on asset, bank size and return on equity has a mixed finding, while credit risk has a negative impact on deposit money bank in Nigeria. The study recommend there is a need for the banks to critically examine their operations in relation to their total assets, credit risk, interest margin, liquidity ratio, as well as their recent performance trends in the context of return on assets and returns on equity, while making relevant policy adjustment to these performance determinants for efficient and effective returns in the long run.