The determinants of profitability among deposit money banks (DMBS) in Nigeria post consolidation

Abstract

This paper examines factors influencing profitability among Deposits Money Banks (DMBs) in Nigeria.
Five internal determinants were identified and deployed, three of these variables were found to contribute
to variation of bank profitability: bank size which is measured by log of total assets, is negative and
significantly related to profitability of bank; capital adequacy ratio is also negatively related to and
statistically significant to variation in bank profitability. The external determinants of financial structure
and macroeconomic variables adopted depict no significant influence on profitability. Our findings
suggest that some banks in Nigeria may be suffering from diseconomy of scale which is as are result of
inefficiencies that may be associated with large complex organizations. This study also shows that
management expenses, current and saving deposit accounts variables does not have any effects on bank
profitability variation.