Impact of equity ownership structure on the operating performance of Nigerian Banks (2002-2011)
*Ezugwu CI and Alex Abiremi Itodo
Department of Accounting, Faculty of Management Sciences, Kogi State University, Anyigba
*Corresponding Author E-mail: iykrydz2001, EzugwuChrisIyke
Accepted 11 July, 2014
This study investigates the influence of equity ownership structure on the operating performance of listed Nigerian banks from 2002 to 2011. A data set on bank equity ownership structure and bank profitability, covering one hundred and eighty observations from eighteen out of the twenty-one banks was used for the study. Using pooled cross sectional regression techniques for the entire sample for the ten- year period with ROA, ROE and NIM/TA, as alternate measures of performance, the signs of the regression coefficients and their significance levels are almost consistent across the different measures of profits. The results challenge many of the widely held view concerning this research topic. This intriguing result suggests that, though the banks in Nigeria is concentrated with only five percent of the shareholders controlling two out of every three shares in the sector; it does not result to superior returns on total assets or shareholders equity. This unusual result has been attributed to the events that shaped banks operations during the study, especially the bank recapitalization exercise. Banks assets and capitalization increased significantly during the period without sufficient commensurate investment windows to enhance their profitability.
Keywords: Equity, Ownership Structure, operating performance, Banks and Profitability