Abstract
Bank capital is one of the protective and necessary parameters for better performance in any banking system. This may explain why the industry in Nigeria has been constantly recapitalized for sectorial enhancement. Given the various bank capital reforms the sectors have undergone and a number of interventions, the question arose: How adequate is capital? The study used descriptive statistics and Levene’s test for equality of variance, as well as an independent sample t-test to look at the (10) ten various performance parameters for both pre- and post- recapitalization periods. From the results of the analysis, most of the performance parameters did not improve after post-recapitalization. This answers the question posed by the study that capital is not adequate in the Nigerian banking sector. Therefore, there is a need to inject more bank capital into the Nigerian banking sector if this sector must have a greater impact and respond to the challenges of the Nigerian economy for sustainable growth and development.
Highlights
Reforms in the Nigerian banking sector have always been aimed at repositioning and deepening the financial system in order to ensure the desired growth of the Nigerian economy and favorable competition at the global financial arena in accordance with established national, regional and international standards and best practices
In sum- sets to deposits (LAD); banking system capital to mary, the literature and the empirical review made assets (BSC); banking system capital adequacy ratio above could not establish firmly whether capi- (CAR); banking system non-interest income to total tal, as often as its being raised income (NIIC); banking system net interest margin as regulatory requirements, determines (NIM); banking system cost to income ratio (BCI); bank’s performance or not
The independent sample t-test the banking system cost to income ratio (p (0.669 of equality of mean(s) result revealed that at the 5 and 0.670 > 0.05)), the null hypothesis is percent level of significance, there existed a signif- accepted as being statistically significant
Summary
Reforms in the Nigerian banking sector have always been aimed at repositioning and deepening the financial system in order to ensure the desired growth of the Nigerian economy and favorable competition at the global financial arena in accordance with established national, regional and international standards and best practices. This study desires to look at the post-recapitalization policy of 2004–2005, which is the last major recapitalization in the country.
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