CAPITAL RISK AND FINANCIAL PERFORMANCE OF LISTED DEPOSIT MONEY BANKS IN NIGERIA

Abstract

This study examines the relationship between capital risk and financial performance of listed deposit money banks from 2020 to 2024. Capital risk, as an independent variable is represented by capital adequacy ratio while financial performance, which is the dependent variable is represented by return on equity. The population of the study consist of the thirteen (13) listed deposit money operating in the Nigerian exchange within the study period. The study used the census sampling technique in arriving at a sample size of thirteen (13) listed firms. Data collection for analysis used the secondary source. Data collected were analysed using the simple linear regression model with specific on the random regression model. The findings of the study revealed that capital risk has a significant positive effect on financial performance. In line with the finding, the study recommends that listed deposit money banks should consider enhancing capital adequacy requirements to ensure that banks maintain sufficient capital buffers, which would improve their resilience and financial performance.