International Journal of Business and Social Science

ISSN 2219-1933 (Print), 2219-6021 (Online) DOI: 10.30845/ijbss

Impact of Bank Size on the Performance of Deposit Money Banks in Nigeria
ISEDU, Mustafa, Ph.D; Erhabor, Osaruyi Jeffrey, Ph.D.

This paper empirically investigated the relationship between Bank size and the performance of deposit money banks in Nigeria. Specifically, changes in financial performance were examined on the basis of the relative effect on bank size, credit risk, liquidity risk, market risk, and operational risk. Panel data analysis technique was used in the estimation of the specified model. The fixed effects were adopted in the empirical analysis. The results from the empirical analysis revealed that Bank size, does not have significant relationship with deposit money banks performance in Nigeria. The other hypothesized variables, Credit risk , Market risk and Operational risk do not have any significant relationship with the performance of deposit money banks. Liquidity risk variable is a significant determinant of deposit money banks’ performance in Nigeria in the period under investigation. On the bases of the outcome of the empirical analysis, this paper recommended that bank management should continuously lay more emphasis on liquidity risk management in order to ensure that banks have adequate cash to meet the depositors demand daily. The study also added a new clause to existing findings in the extant literature. Contrary to finding from other studies, this study has demonstrated that irrespective of the assets or size of a bank, it does not in any way determine its overall performance, what matters is the issue of liquidity risk. In addition, this study provides more evidence on the factors that determine bank performance of deposit money banks in Nigeria, this is the contribution to knowledge of this paper..

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