DETERMINANTS OF FINANCIAL DISTRESS OF QUOTED COMMERCIAL BANKS IN NIGERIA

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DETERMINANTS OF FINANCIAL DISTRESS OF QUOTED COMMERCIAL BANKS.pdf (278.78 KB)

Date

2021-06-01

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Department of Accounting, Nasarawa State University, Keffi

Abstract

This study examines the determinants of financial distress of quoted deposit money banks in Nigeria. The study adopts ex-post facto research design. The population of the study is the 14 quoted DMBs in Nigeria as at 2019. Then, a non-probability method in form of judgmental/purposive sampling technique was used and 13 quoted DMBs were selected based on consistent data set. The data for the study were collected from the annual reports and accounts of the sampled banks for the period of ten (10) years spanning 2010 through 2019. This study made use of panel regression to analyze the data and found out that, firm size is significant negatively related to financial distress of quoted DMBs in Nigeria. In the case of profitability and financial distress, an insignificant positive effect was found. Financial leverage is insignificant and negatively related to financial distress of quoted DMBs in Nigeria. Liquidity is significant and positively related to financial distress of quoted DMBs in Nigeria. Based on the findings of the study, it is concluded that, banks ability to increase their assets based makes the banks to be more stable and thus reduces cases of financial distress. It is recommended among others that, quoted DMBs in Nigeria should make efforts towards increasing their assets based for better profitability and consequently reducing financial distress.

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Keywords

Financial Distress, Firm Size, Profitability, Leverage, Liquidity, Quoted DMBs, Nigeria.

Citation

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https://keffi.nsuk.edu.ng/handle/20.500.14448/710

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