The Impact of Capital Structure and Performance of Deposit Money Banks in Nigeria

This study examined to examine the impact of capital structure and performance of deposit money banks in Nigeria. Specifically, the study examine the impact of debt capital on performance of deposit money banks in Nigeria, Investigate the impact of equity capital on performance of deposit money banks in Nigeria and determine the impact of debt-to-equity ratio on performance of deposit money banks in Nigeria The study adopted ex-post facto research design and the secondary date used was obtained from the published financial reports of the sampled Deposit Money Banks (DMBs) and Nigerian Stock Exchange (NSE) fact book for a period of 15 years, spanning from 2009 – 2023. Out of the 22 DMBs in Nigeria, only 6 Deposit Money Banks were used which are (First Bank of Nigeria, Zenith Bank Plc, Access Bank Plc, Guaranty Trust Bank Plc, Fidelity Bank Plc, Wema Bank Plc) were purposively sampled for this study. Data collected was analyzed using descriptive and inferential statistical analysis. Descriptive statistics of mean, standard deviation, minimum and maximum values were used describe the variables used in the study. The summary of the findings are: Debt capital has a negative significant effect on the Return on equity of Deposit Money Banks in Nigeria for the period covered to the tune of -0.0002138(p=0.0360.05); Debt Equity ratio has a negative insignificant effect on Return on equity of Deposit Money Banks in Nigeria to the tune of -0.0244311 (p=0.235> 0.05); Based on the findings, it was recommendations that Deposit money banks (DMBs) should set a debt level that will maximize their Debt capital level.