An Assessment of Capital Structure Decisions among Listed Deposit Money Banks in Nigeria

Abstract

This study aimed to assess Capital Structure Decision among listed Deposit Money Banks (DMBs) in Nigeria by assessing the effects of total equity and debts on capital structures of DBMs in Nigeria. The study alsocorrelated asset tangibility to firm size and examined the effect on the capital structure of the Banks. The study used secondary data collected from the annual accounts and reports of the selected ten (10) banks purposively selected for twelve (12) years covering 2011- 2022. The study’s population is made up of twenty-four existing listed deposit money banks on the list on the Nigerian Exchange Group plc based on the availability of data. The study employed explanatory variables of total equity, total debt, asset tangibility, and firm size to capture financial statement components. Data was analyzed using descriptive analysis and panel regression models. Findings revealed that equity, debts, and assets tangibility have positive and significant effects on the capital structure decision of the selected banks, while the firm’ size does not. The study concluded that equity capital, debt capital, and long-term assets are relevant in capital structure decision of listed deposit money banks in Nigeria. It is recommended that management should carefully assess the appropriate mix of equity and debt that maximizes income potentials and continuity of the firm in the context of substantial tangibility of the assets.