CAPITAL BUDGETING PRACTICES IN QUOTED BANKS IN NIGERIA

The aim of the paper is provide evidence about the determinants of capital budgeting in Nigeria banks. A sample of Nigerian quoted banks was observed for the year 2012. The study utilized the regression analysis method. The study found a significant positive relationship between fixed asset acquired, and profitability, bank performance and leverage. Furthermore, the study found no significant relationship between fixed asset and retention ratio and between fixed assets acquired and Return on assets. These results suggest that there exist an association between size of capital budget and bank profitability, and also indicated that dividend retention ratio does not determine the size of capital budget. It was found out that bank size, profitability and leverage are determinants of capital budgeting in the banking sector. It was recommended that Capital budgeting decision is a non-negotiable investment decision making process; hence management of banks should take it serious.