DETERMINANTS OF THE PROFITABILITY OF LISTED DEPOSIT MONEY BANKS IN NIGERIA

Abstract

This study examines the determinant of profitability of listed Deposit Money Banks in Nigeria over the period of 10 years (2011-2020). The Expo facto research design was adopted for the study. The study used census sampling technique to arrive at sample size of fourteen (14) DMBs listed the floor of Nigerian Stock Exchange as at 2020. Secondary data were extracted from annual reports and accounts of the sampled banks and analyzed using multiple regression. The regression result shows that asset quality, liquidity, growth rate and capital adequacy have a positive and significant impact on profitability of the sampled banks, while information technology has a positive and insignificant impact on profitability. Therefore, the study concludes that asset quality, liquidity growth rate and capital adequacy improve profitability of listed DMBs in Nigeria. Based on these findings we recommend that the management of deposit money banks should use credit risk management strategies to complement liquidity management in order to minimize the rate of non-performing loans in deposit money banks listed in Nigeria.