Firm Attributes and Financial Performance of Quoted Deposit Money Banks in Nigeria

Olanrewaju Atanda Aliu; Mudathir Olanrewaju Salam; Abdullateef Eleran  Aliu; Is-haq Abayomi Yahaya

doi:10.52461/sabas.v7i1.4601

Authors

Olanrewaju Atanda Aliu Department of Accounting, University of Ilorin, Nigeria
Mudathir Olanrewaju Salam Nigeria Revenue Services, Nigeria
Abdullateef Eleran Aliu Nigeria Revenue Services, Nigeria
Is-haq Abayomi Yahaya Federal Polytechnic, Bidah, Nigeria

DOI:

https://doi.org/10.52461/sabas.v7i1.4601

Keywords:

Firm size, Capital adequacy, Board size, Financial performance, Deposit money banks, Nigeria

Abstract

The financial performance of Nigeria’s deposit money banks (DMBs) has shown inconsistent trend, despite many regulatory measures aimed at bolstering the banking sector performance. This has raised major issues regarding the firm attributes that influence the banks’ profitability. This study explores the effects of selected firm attributes which include firm size, capital adequacy, liquidity and board size on the financial performance of quoted DMBs operating in Nigeria. The research utilises an ex-post facto research strategy to examine the data extracted from the accounts and annual reports of 12 deposit money banks listed on the Nigerian Exchange Group between 2020 and 2024. The study analyses data with multiple regression techniques. Findings demonstrate that both firm size and capital adequacy relate positively and significantly to financial performance. In contrast, liquidity revealed negative but statistically significant effect, while board size reported no significant effect on the financial performance of DMBs in Nigeria. The study recommends that management DMBs should adopt sustainable growth approaches such as mergers, acquisitions, expansion to enhance their asset base to become larger banks and attain better financial performance, among others.

Author Biographies

Olanrewaju Atanda Aliu, Department of Accounting, University of Ilorin, Nigeria

Department of Accounting, University of Ilorin, Nigeria

Mudathir Olanrewaju Salam, Nigeria Revenue Services, Nigeria

Nigeria Revenue Services, Nigeria

Abdullateef Eleran Aliu, Nigeria Revenue Services, Nigeria

Nigeria Revenue Services, Nigeria

Is-haq Abayomi Yahaya, Federal Polytechnic, Bidah, Nigeria

Federal Polytechnic, Bidah, Nigeria

References

Adebayo, A. A., & Lawal, B. O. (2022). Board structure and financial performance of Nigerian banks: The moderating role of regulatory compliance. Nigerian Journal of Accounting and Finance, 16(1), 45–67.

Adeusi, S. O., Azeez, B. A., & Oke, M. O. (2023). Firm-specific characteristics and financial performance of deposit money banks in Nigeria. Journal of Finance and Economics, 11(3), 149–159. https://doi.org/10.12691/jfe-11-3-3.

Adeyemi, S. B. (2021). Optimal firm size and profitability in the Nigerian banking sector: A threshold analysis. West African Journal of Industrial and Academic Research, 25(1), 78–94.

Adeyemi, S. B., & Alabi, O. A. (2021). Firm attributes and financial performance of listed deposit money banks in Nigeria. Journal of Accounting and Financial Management, 7(4), 34–51.

Ahmed, M. I., & Uche, C. O. (2023). Capital adequacy and risk management in Nigerian banks: Post-COVID implications. African Journal of Economic and Management Studies, 14(3), 412–428.

Ahmed, M. I., & Uche, C. O. (2024). Firm-specific determinants of bank performance in Nigeria: A dynamic panel analysis. Nigerian Journal of Economic and Social Studies, 66(1), 89–112.

Aidoo, S., Nombare, E., & Boamah, J. Y. (2024). Board Size, Board Independence, Board Expertise and the Financial Performance of Listed Manufacturing Firms in Ghana: Does Board Commitment Play a Role?. Journal of Economics, Finance and Accounting Studies, 6(2), 49-69.

Arhinful, R., Mensah, L., Gyamfi, B. A., & Obeng, H. A. (2025). The impact of non-performing loans on bank growth: The moderating roles of bank size and capital adequacy ratio—Evidence from US banks. International Journal of Financial Studies, 13(3), 165.

Athanasoglou, P. P., Brissimis, S. N., & Delis, M. D. (2008). Bank-specific, industry-specific and macroeconomic determinants of bank profitability. Journal of International Financial Markets, Institutions and Money, 18(2), 121–136.

Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99–120. https://doi.org/10.1177/014920639101700108

Bello, A., & Musa, A. (2023). Effect of capital adequacy on financial performance of listed commercial banks in Nigeria. International Journal of Banking and Finance Research, 10(1), 23–41.

Bozic, I., & Bozic, A. (2025). Commercial banking and financial stability: evaluating internal and external determinants. Journal of Business and Economic Options, 8(1), 1-14.

Bui, T. N., Nguyen, X. H., & Pham, K. T. (2023). The effect of capital structure on firm value: A study of companies listed on the Vietnamese stock market. International Journal of Financial Studies, 11(3), 100-112.

Eze, O. R., & Onyi, E. C. (2021). Firm size and profitability of Nigerian banks: Post-consolidation evidence. Journal of Economics and Business Research, 27(1), 55–73.

Gumede, S. D., & Takawira, O (2025). Maintaining liquidity to improve the performance of small businesses. International Journal of Entrepreneurship and Business Development 8(4):565-575.

Hunjra, A. I., Mehmood, A., Nguyen, H. P., & Tayachi, T. (2022). Do firm-specific risks affect bank performance?. International Journal of Emerging Markets, 17(3), 664-682.

Ibrahim, M., & Umar, H. (2023). Capital adequacy and financial performance: A comparative analysis of Islamic and conventional banks in Nigeria. Journal of Islamic Accounting and Business Research, 14(4), 612–630.

Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305–360.

Khan, M. N., & Sharif, S. (2025). Smart Liquidity Risk Management and Islamic Banking Institutions of Pakistan: Challenges and Way Forward. Journal of Islamic Business and Management, 15(02). 118-137.

Lijuan, M. (2025). Capital Adequacy Ratio. In Dictionary of Contemporary Chinese Economics (pp. 1894-1895). Singapore: Springer Nature Singapore.

Mirichii, J. M., Akims, M. A., Mbugua, L., & Nyachae, S. M. (2023). Capital adequacy, asset quality, management efficiency, earnings ability, liquidity and financial performance of deposit taking savings and credit cooperative societies in Kenya. Journal of Finance and Accounting, 7(11), 306-328.

Moroz, K. (2025). Liquidity management methods in small retail enterprises. Sciences of Europe, (158), 23-26.

Nwankwo, O. C., & Osho, A. E. (2022). Corporate governance mechanisms and financial stability of Nigerian banks: The moderating role of risk management committees. Journal of Corporate Governance Research, 6(1), 33–52.

Ogunleye, O. O., & Fadeyi, O. (2021). Liquidity-profitability trade-off in the Nigerian banking sector: An empirical investigation. Journal of Finance and Investment Analysis, 10(2), 1–18.

Ojo, O. M. (2022). Liquidity management and profitability of listed deposit money banks in Nigeria. Journal of Accounting and Financial Management, 8(3), 45–62.

Okonkwo, I. V., & Nweze, A. U. (2020). Board size and financial performance of quoted conglomerates in Nigeria. International Journal of Management and Economics, 56(3), 215–231.

Olalekan, O. O., & Adeyemi, S. B. (2021). Financial performance measures in the Nigerian banking industry: A comparative analysis. West African Journal of Industrial and Academic Research, 24(1), 112–129.

Omodero, C. O., & Ogbonnaya, A. K. (2020). Liquidity and capital adequacy as determinants of bank performance in Nigeria. Journal of Accounting, Business and Finance Research, 8(2), 54–63.

Osman, M. A. M., & Samontaray, D. P. (2022). Corporate governance and performance of insurance companies in the Saudi market. The Journal of Asian Finance, Economics and Business, 9(4), 213-228.

Sharma, R., Mehta, K., & Goel, A. (2023). Non-linear relationship between board size and performance of Indian companies. Journal of Management and Governance, 27(4), 1277-1301.

Upreti, R. (2024). Impact of Capital Adequacy Ratio, Net Interest Margin, and Debt to Equity Ratio on the Financial Performance of Nepalese Commercial Banks. Nepalese Journal of Business, 11(4), 106-125.

Uwalomwa, U., Olamide, O., & Francis, K. (2018). The effect of board characteristics on the financial performance of listed banks in Nigeria. Academy of Strategic Management Journal, 17(6), 1–11.

Warren, M. (2025). The rise and fall of Silvergate Bank: lessons for prudential regulation of crypto-sector banking. Journal of Banking Regulation, 26(1), 62-84.

Yermack, D. (1996). Higher market valuation of companies with a small board of directors. Journal of Financial Economics, 40(2), 185–211.

Zou, H., & Stan, C. V. (2022). Revisiting the firm size-profitability relationship: Evidence from African commercial banks. Journal of African Business, 23(4), 891–908.