Ownership Structure and Bank Performance in Nigeria

Abstract

The ownership structure of Nigerian banks and their performance from 2017 to 2021 were examined in this research. Panel analysis methods include OLS, fixed effects, random effects, and the Hausman test. The study's independent variables were debt ratio, foreign ownership, managerial ownership, and institutional ownership, while ROA was its dependent variable. Since the Hausman test probability value above the 5% significance requirement, the random effect model was chosen for the investigation. The study focused on random effect model effects. Foreign ownership, managerial ownership, and institutional ownership negatively impacted bank performance, notably return on assets. The study also found a modest negative association between debt ratio and bank performance. This data shows that ownership structure greatly impacts Nigerian bank performance. The study recommended that the government restrict foreign bank ownership, promote management ownership, and regulate bank debt to minimize bank collapse.