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ABSTRACT
The study investigates the effects of prudential guidelines on the performance of deposit money banks in Nigeria.The goal of the study is to examine the relationship between C.A.M.E.L.S and the performance of deposit money banks in Nigeria. The study wishes to investigate the relationship between capital adequacy, asset quality, earnings ratio, liquidity ratio and sensitivity to market risk on the performance of deposit money banks in Nigeria.
A time series data survey covering the period 1990 - 2021 is used for the study. This study employs OLS econometric technique and descriptive statistics for the empirical estimation of the model.
The outcome of the study revealed thatcapital adequacy has a positive relationship with the performance of deposit money banks in Nigeria and is statistically significant at 5% level. Asset quality has a positive impact on the performance of deposit money banks in Nigeria and is statistically significant at 5% conventional level. The relationship between bank earnings and the performance of deposit money banks is negative and statistically insignificant at the 5% level. Bank Liquidity ratio negatively affect performance of deposit money banks in Nigeria and statistically significant at 5% level. Lastly, Bank sensitivity is negative and statistically insignificant with performance of deposit money banks in Nigeriaat 5% level.
The study however recommends that future studies should moderate some variables that have a significant relationship between prudential guidelines and the performance of deposit money bask as it may lead to more improvement due to the inclusiveness of previous research result. It is suggested that future studies should integrate prudential guidelines with corporate governance mechanisms that have important association with the performance of deposit money banks to help enhance it. Finally, it suggested that the performance of deposit money bank should be tested with different perspective like accounting and marketing measurements in order to maximize shareholders wealth.
