EMPIRICAL ANALYSIS OF BANKING SECTOR RECAPITALISATION AND PERFORMANCE IN NIGERIA: A HOLISTIC APPROACH

Abstract

The Central Bank of Nigeria twenty-five billion naira recapitalisation policy was a great lip into the global financial market as banks stability is reduced since 2005. The study investigates the holistic approach to empirical analysis of banking sector recapitalisation and performance. The paper anchored on “Minsky’s Financial Instability Hypothesis”. Descriptive Statistics of mean, standard deviation and paired t-test were adopted for analysis. Result revealed that mean of the variables; net interest margin, funding cost, yield on equity, return on assets and return on equity were higher in the pre recapitalization periods compared to those of post recapitalization periods and significance at 0.5 levels. The paper recommended that to avoid banks failure, banks facing financial crisis should consolidate and be financially stronger through merger. Banks should diversify their investments to improve on their assets base. Banks should improve their total asset turnover and diversify in such a way that they can generate more income on their assets. Since total assets improve profitability in the short run, investing in more fertile areas should be prioritized by banks. Major Banks’ product should be on how to draw closer all small servers. This will as well increase banks loan book value.