Effect of bank’s sizes and age on the financial performance of deposit money banks in Nigeria
Abstract
This research explores the impact of bank size and age on the financial performance of deposit money banks in Nigeria. DMB are crucial for allocating funds from savers to investors and managing financial risks. The study aims to determine how bank size and age influence ROA and ROE. Data analysis is conducted using ex post facto research design and panel data analysis. The study reveals a significant strong relationship between bank size and age with ROA and ROE for Nigerian deposit money banks during the period from 2015 to 2021. Increased bank size and age are associated with improved financial performance. The research concludes that bank size and age have a significant impact on the performance of deposit money banks in Nigeria during the specified period. Thus, the study recommends that listed deposit money banks should consider expanding their firm size through strategic expansion initiatives to enhance financial performance. Further research should encompass a broader selection of listed firms in Nigeria and employ diverse analytical tools to validate and expand upon these findings.
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Sufian F., Habibullah M. S. Globalizations and bank performance in China. Research in International Business and Finance. 2012. № 26(2). Р. 221-239.
Muhindi KA, Ngaba D. Effect of firm size on financial performance on banks: Case of commercial banks in Kenya. International Academic Journal of Economics and Finance. 2018. № 3(1). Р.175- 190.
Babalola A., Abiola R. Financial ratios analysis of firms. Journal of management sciences. 2018. № 1(4). Р. 132-137.
Vinals J., Pazarbasioglu C., Surti J., Narain A., Erbenova M., Chow J. Creating a safer financial system: Will the Volcker, Vickers, and Liikanen structural measures help. IMF Staff Discussion Note 13/04. 2013.
Laeven L., Ratnovski L., Tong H. “Bank size and systemic risk: some international evidence,” International Monetary Fund. Mimeo. 2014.
Sritharan V. Does firm size influence on firm‟s Profitability? Evidence from listed firms of Sri Lankan Hotels and Travels sector. Research Journal of Finance and Accounting. 2015. ISSN 2222-2847
Teshome E., Debela K., Sultan M. Determinant of financial performance of commercial banks in Ethiopia: Special emphasis on private commercial banks. African Journal of Business Management. 2018. № 12(1). Р. 1-10.
Adam M. H. M. (2018). Evaluating the Financial Performance of Banks using financial ratios-A case study of Erbil Bank for Investment and Finance. European Journal of Accounting Auditing and Finance Research 2(6):162-177.
Alex, M.K. & Ngaba, D. (2018). Effect of firm size on financial performance on banks: case of commercial banks in Kenya, International Academic Journal of Economic & Finance, 3(1), 175 – 190.
Almazari, A. A. (2014), “Impact of Internal Factors on Bank Profitability: Comparative Study between Saudi Arabia and Jordan”. Journal of Applied Finance & Banking, 4(1), 125-140.
Appah, E. & Tebepah, F.S. (2018). Money, Financial Institutions and Markets, Kadmon Printing Company Limited.
D'amato, A., & Falivena, C. (2020). Corporate social responsibility and firm value: Do firm size and age matter? Empirical evidence from European listed companies. Corporate Social Responsibility and Environmental Management, 27(2), 909-924.
Gujarati, D. N., & Porter, D. C., (2019). Basic econometrics. Tata McGraw-hill education
Kasman A, Kasman S (2016). Bank size, competition and risk in the Turkish banking industry. Empirica 43(3):607-631.
Olowokure, O., Tanko, M. & Nyor, T. (2015). Firm structural characteristics and financial reporting quality. International Business Research, 9(1), 106-122.
Ongore, V. O. & Kusa, G.B. (2015). Determinants of financial performance of commercial banks in Kenya. International Journal of Economics and Financial Issues, 3(1), 237.
Onuonga, S. M. (2017). The Analysis of Profitability of Kenyas Top Six Commercial Banks:Internal Factor Analysis. American International Journal of Social Sciences, 3(5), 94-103Sufian (2016).
Teimet, R., Lishenga, J., Iraya, M. & Duncan, E. (2019). The effect of bank size on profitability of commercial banks in Kenya, International Journal of economics, Commerce & Management, VII (12), 202 – 216.
Varotto S, Zhao L (2018). Systemic risk and bank size. Journal of International Money and Finance 82(1):45-70.
Kazzah, A. Y., Yushau, I. A., Zainab, D. & Abbas, U. (2020). Firm’s size characteristics and financial performance of deposit money banks: evidence from Nigeria. 1-9
Boachie, C. (2023), "Corporate governance and financial performance of banks in Ghana: the moderating role of ownership structure", International Journal of Emerging Markets, 18(3), pp. 607-632. https://doi.org/10.1108/IJOEM-09-2020-1146
Kabir, M. A. & Chowdhury, S. S. (2023). Empirical analysis of the corporate social responsibility and financial performance causal nexus: Evidence from the banking sector of Bangladesh, Asia Pacific Management Review 28(1), pp. 1-12
Kwashie, A. A., Baidoo, S. T. & Ayesu, E. K. (2023). Investigating the impact of credit risk on financial performance of commercial banks in Ghana, Cogent Economics & Finance, 10:1, DOI: 10.1080/23322039.2022.2109281
Isayas, Y. N. (2023). Determinants of banks’ profitability: Empirical evidence from banks in Ethiopia, Cogent Economics & Finance, 10:1, DOI: 10.1080/23322039.2022.2031433
Muslih, M. & Marbun, S.O. (2020). The effect of risk management, firm age, and firm size on the performance of banking companies registered in Indonesia Stock Exchange moderated by corporate governance and budget as control variable. International Journal of Science and Society, 2(4), 274-290.
Sufian, F. & Habibullah, M. S. (2012). Globalizations and bank performance in China. Research in International Business and Finance, 26(2), 221-239.
Muhindi KA, & Ngaba D (2018). Effect of firm size on financial performance on banks: Case of commercial banks in Kenya. International Academic Journal of Economics and Finance 3(1):175- 190.
Babalola, A. & Abiola, R. (2018). Financial ratios analysis of firms. Journal of management sciences, 1(4), 132-137.
Vinals, J., Pazarbasioglu, C. Surti, J., Narain A., Erbenova M., & Chow J., (2013). Creating a safer financial system: Will the Volcker, Vickers, and Liikanen structural measures help. IMF Staff Discussion Note 13/04.
Laeven, L., L. Ratnovski, & H. Tong, (2014). “Bank size and systemic risk: some international evidence,” International Monetary Fund. Mimeo.
Sritharan, V., (2015). Does firm size influence on firm‟s Profitability? Evidence from listed firms of Sri Lankan Hotels and Travels sector. Research Journal of Finance and Accounting. ISSN 2222-2847
Teshome, E., K. Debela & M. Sultan. (2018). Determinant of financial performance of commercial banks in Ethiopia: Special emphasis on private commercial banks. African Journal of Business Management, 12(1), 1-10.
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