E-ISSN 0331-8753 | ISSN 0794-5698
 

Original Research 


Modeling the Effect of Bank Specific Factors on Financial Performance of Commercial Banks in Nigeria: Panel Data Regression Approach

Yisa Yakubu, Mercy Sitamara Egopija.

Abstract
Periodic checking and evaluation of financial performance of the banking sector is a way of sustaining the development of a nation’s economy. The key indicators of the banks’ financial performance are their return on assets (ROA) and return on equity (ROE). ROA indicates the proportion of profit a company makes in relation to its assets while ROE measures a corporation's profitability with respect to the money shareholders have invested. A bank’s financial performance is affected by some specific factors like capital adequacy ratio (CAR), credit risk (CRISK), management quality, liquidity ratio (LIQ.RAT.) and bank size. This work models the effect of these factors on the overall financial performance of some sampled commercial banks in Nigeria using panel data regression approach. The fitted ROA model accounted for 83% of the total variability in the data and revealed that CAR, CRISK, and LIQ.RAT were significant at both 1% and 5% levels while the ROE model accounted for 69% and revealed that CRISK and LIQ.RAT were significant. The Guaranteed Trust Bank (GTB) had the highest average ROA, ROE and CAR throughout the period under review while Zenith bank was the best in terms of credit risk, management quality and liquidity ratio.

Key words: Financial Performance, Commercial Banks, Evaluation, Panel Data, Economy


 
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Pubmed Style

Yakubu Y, Egopija MS, . Modeling the Effect of Bank Specific Factors on Financial Performance of Commercial Banks in Nigeria: Panel Data Regression Approach . Nig. J. Basic Appl. Sci.. 2020; 28(1): 40-47. doi:10.4314/njbas.v28i1.6


Web Style

Yakubu Y, Egopija MS, . Modeling the Effect of Bank Specific Factors on Financial Performance of Commercial Banks in Nigeria: Panel Data Regression Approach . http://www.njbas-udus.com/?mno=56538 [Access: August 17, 2020]. doi:10.4314/njbas.v28i1.6


AMA (American Medical Association) Style

Yakubu Y, Egopija MS, . Modeling the Effect of Bank Specific Factors on Financial Performance of Commercial Banks in Nigeria: Panel Data Regression Approach . Nig. J. Basic Appl. Sci.. 2020; 28(1): 40-47. doi:10.4314/njbas.v28i1.6



Vancouver/ICMJE Style

Yakubu Y, Egopija MS, . Modeling the Effect of Bank Specific Factors on Financial Performance of Commercial Banks in Nigeria: Panel Data Regression Approach . Nig. J. Basic Appl. Sci.. (2020), [cited August 17, 2020]; 28(1): 40-47. doi:10.4314/njbas.v28i1.6



Harvard Style

Yakubu, Y., Egopija, M. S. & (2020) Modeling the Effect of Bank Specific Factors on Financial Performance of Commercial Banks in Nigeria: Panel Data Regression Approach . Nig. J. Basic Appl. Sci., 28 (1), 40-47. doi:10.4314/njbas.v28i1.6



Turabian Style

Yakubu, Yisa, Mercy Sitamara Egopija, and . 2020. Modeling the Effect of Bank Specific Factors on Financial Performance of Commercial Banks in Nigeria: Panel Data Regression Approach . Nigerian Journal of Basic and Applied Sciences, 28 (1), 40-47. doi:10.4314/njbas.v28i1.6



Chicago Style

Yakubu, Yisa, Mercy Sitamara Egopija, and . "Modeling the Effect of Bank Specific Factors on Financial Performance of Commercial Banks in Nigeria: Panel Data Regression Approach ." Nigerian Journal of Basic and Applied Sciences 28 (2020), 40-47. doi:10.4314/njbas.v28i1.6



MLA (The Modern Language Association) Style

Yakubu, Yisa, Mercy Sitamara Egopija, and . "Modeling the Effect of Bank Specific Factors on Financial Performance of Commercial Banks in Nigeria: Panel Data Regression Approach ." Nigerian Journal of Basic and Applied Sciences 28.1 (2020), 40-47. Print. doi:10.4314/njbas.v28i1.6



APA (American Psychological Association) Style

Yakubu, Y., Egopija, M. S. & (2020) Modeling the Effect of Bank Specific Factors on Financial Performance of Commercial Banks in Nigeria: Panel Data Regression Approach . Nigerian Journal of Basic and Applied Sciences, 28 (1), 40-47. doi:10.4314/njbas.v28i1.6





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