International Journal of Management and Business Studies

International Journal of Management and Business Studies ISSN 2167-0439 Vol. 13 (6), pp. 001-011, June, 2024. Available online at www.internationalscholarsjournals.org © International Scholars Journals

Full Length Research Paper

Key Drivers of Profitability in Nigeria’s Banking Sector: A Post-Consolidation Perspective

Kenny Adedapo Soyemi1, Lanre Akinpelu2 and Jumoke Omowunmi Ogunleye3

1Department of Accounting, Olabisi Onabanjo University, Ago Iwoye, Ogun State, Nigeria.
2Department of Accountancy, Federal Polytechnic, Ilaro, Ogun State, Nigeria.
3Department of Accounting, University of Lagos, Akoka, Lagos state, Nigeria.

Accepted 13 April, 2024

This paper examines factors influencing profitability among Deposits Money Banks (DMBs) in Nigeria. Five internal determinants were identified and deployed, three of these variables were found to contribute to variation of bank profitability: bank size which is measured by log of total assets, is negative and significantly related to profitability of bank; capital adequacy ratio is also negatively related to and statistically significant to variation in bank profitability. The external determinants of financial structure and macroeconomic variables adopted depict no significant influence on profitability. Our findings suggest that some banks in Nigeria may be suffering from diseconomy of scale which is as are result of inefficiencies that may be associated with large complex organizations. This study also shows that management expenses, current and saving deposit accounts variables does not have any effects on bank profitability variation.

Keywords: Profitability, Deposits Money Banks, Post-Consolidation, Nigeria.