Imperative of Capital Structure on Financial Performance of Selected Deposit Money Banks DMBS in Nigeria

This study is to determine the relationship between capital structure and financial performance of deposit money banks in Nigeria. The reason for this study stems from the fact that capital structure plays an important part in the decision making process of investors. Using ex post facto research design and regression design to investigate the effect of capital structure on financial performance of deposit money banks in Nigeria. The population comprised all deposit money banks with both international and national authorization which are listed under the financial sector of the main investment market segment at the Nigerian Stock Exchange NSE . The main tool is the panel least square using the multiple regression model, Statistical evaluation of the global utility of the analytic model so as to determine the reliability of the result obtained were carried out using coefficient of determination r2 , the student T test and F test. Coefficient of Determination r2 Test. Based on the findings obtained from the results, the study suggests that, stakeholders in the banking industry should critically examined the proportion of short and long term debts when establishing deposit money banks' capital structure in Nigeria. In line with the findings of this study, it is recommended among others that Shareholders of banks should put more emphasis on the use of debt finance and its optimal utilization, as this serves as a tool for controlling managers deceptive behavior. Banks should conduct an in depth study of the nature and the volume of debt portion of capital mixes in order to understand how best to optimize their capital structures for better performance in the future. Obalakumo Anderson P | Dr. Odogu Laime I. "Imperative of Capital Structure on Financial Performance of Selected Deposit Money Banks (DMBS) in Nigeria" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-8 | Issue-3 , June 2024, URL: https://www.ijtsrd.com/papers/ijtsrd65009.pdf Paper Url: https://www.ijtsrd.com/management/accounting-and-finance/65009/imperative-of-capital-structure-on-financial-performance-of-selected-deposit-money-banks-dmbs-in-nigeria/obalakumo-anderson-p