Impact Of Shareholders Value Creation On The Performance Of The Nigeria Banking Industry

ABSTRACT

The study investigated the impact of shareholders’ value creation on performance of the Nigeria banking industry. The study was carried out for the period 1997 to 2016 and multiple regression analysis was used for data analysis. Return on assets (ROA) was used to measure bank performance. Based on the results, it was found that shareholders’ value has a negative and significant impact on bank performance in Nigeria. Stock market ratio had a negative and in insignificant impact on bank performance while the impact of leverage ratio was found to be insignificant. Hence, the need to monitor overall banking operations, protecting the assets of the firm, and holding executive directors and managers accountable to the firms’ key stakeholders to ensure the survival, sustainability, and growth of Nigerian banks was recommended.

TABLE OF CONTENTS

Title page ﾿ i

Dedication ﾿ ii

Acknowledgements ﾿ iii

Declaration ﾿ iv

Certification ﾿ v

Table of contents ﾿ vi

Abstract ﾿ ix

CHAPTER ONE

INTRODUCTION ﾿ 1

1.1 ﾿ Background to the Study ﾿ 1

1.2 ﾿ Statement of Research Problem ﾿ 4

1.3 ﾿ Objectives of the Study ﾿ 5

1.4 ﾿ Research Questions ﾿ 5

1.5 ﾿ Research hypotheses ﾿ 6

1.6 ﾿ Significance of the Study ﾿ 6

1.7 ﾿ Scope of the Study ﾿ 7

1.8 ﾿ Limitation of the study ﾿ 7

1.9 ﾿ Operational definition of terms ﾿ 8

CHAPTER TWO

REVIEW OF RELATED LITERATURE ﾿ 9

2.1 ﾿ conceptual framework ﾿ 9

2.1.1 ﾿ Concept of value creation (VC) ﾿ 10

2.1.2 ﾿ Value creation and corporate restructuring ﾿ 12

2.1.3 ﾿ Rationale of banking sector restructuring in Nigeria ﾿ 16

2.1.4 ﾿ Determinants of value creation ﾿ 17

2.1.5 ﾿ The significance of value ﾿ 18 

2.1.6 ﾿ Profitability as a determinant of value creation ﾿ 20

2.1.7 ﾿ Dividend policy as a determinant of value creation ﾿ 20

2.1.8 ﾿ Financial policy as a determinant of value creation ﾿ 21

2.2 ﾿ Theoretical framework ﾿ 23

2.2.1 ﾿ The value-increasing theory ﾿ 23

2.2.2 ﾿ Consolidation models ﾿ 25

2.3 ﾿ Empirical literature ﾿ 27

CHAPTER THREE

RESEARCH METHODOLOGY ﾿ 34

3.1 ﾿ Research Design ﾿ 34

3.2 ﾿ Area of study ﾿ 34

3.3 ﾿ Source of data collection ﾿ 34

3.4 ﾿ Method of data analysis ﾿ 35

3.5 ﾿ Model Specification ﾿ 36

CHAPTER FOUR

PRESENTATION OF DATA, ANALYSIS AND DISCUSSION ﾿ 38

4.1 ﾿ Presentation of Data ﾿ 38

4.2 ﾿ Descriptive statistics ﾿ 39

4.3 ﾿ Presentation of results and discussion of findings ﾿ 39

4.3.1 ﾿ Regression analysis ﾿ 39

4.3.2 ﾿ Correlation analysis ﾿ 41

4.3.3 ﾿ Test of hypotheses ﾿ 41

4.3.4 ﾿ Discussion of findings ﾿ 42

CHAPTER FIVE 

SUMMARY OF FINDINGS ﾿ 43

5.1 ﾿ Summary of Findings ﾿ 43

5.2 ﾿ Conclusion ﾿ 43

5.3 ﾿ Recommendations ﾿ 43

References ﾿ 45

Appendices ﾿ 48 ﾿