Impact Of Capital Structure On The Profitability Of Banks (A Study Of Selected Deposit Money Banks):- Ukaumunna Nkwachukwu

ABSTRACT

This study examined the impact ofcapitalstructure on the profitability ofselected deposit money banks listed in the Nigerian stock exchange. The data for this study is secondary in nature and sourcedfrom annual reports ofthe selected bank within the period ofthis study (2010 to 2017) and the ordinary least square technique was employed as the analytical tool. The findings showed that out offive selected banks only zenith bank indicated debt-to-equity ratio on return on equity as positive and significant while other fourshowed negative and insignificant on return on equity. The study concludes based on the two hypotheses tested that debt-to~equity ratio and debt ratio have no significant impact on return on equity ofthe banks. In line with the above findings and conclusion the study recommends that the policy measures should be in place to ensure that borrowedfunds are actually channeled into productive purposes as economic policies of lending indicates and equally recommends that bank managers and their cohorts be made to accountfor monies borrowed without going through due process, and therefore individuals or group ofindividuals that get involved infunds misappropriation should be checkedwith offendersseriously sanctioned in order to serve as deterrent.