INVESTIGATING THE IMPACT OF RECAPITALIZATION STRATEGIES ON THE PROFITABILITY OF DEPOSIT MONEY BANKS IN NIGERIA
The main objective of the study is to examine the relationship between recapitalization strategies and profitability of Deposit Money Banks in Nigeria. The study employed secondary data which were gathered and analyzed, using Panel Regression Model. In order to ensure that essential assumptions for a valid regression model are considered and also avoid a spurious regression result, Unit Root Test using the Augmented Dickey-Fuller (ADF) technique was employed. Serial correlation test and normally test were also conducted to estimate the reliability of the model used. Stationarity test (Unit Root Test) was also applied to determine how consistent and reliable the time series data in use are. The research findings revealed that there was no significant relationship between capital adequacy and profitability of Deposit Money Banks in Nigeria, implying that banks capital base is not necessarily a yardstick for enhanced profitability. The study, therefore, recommended that for Deposit Money Banks to achieve the purpose of their recapitalization, they should make frantic efforts to improve on factors which can lead to improved performance, develop more aggressive approach in their profit drive for improved financial position, promote better managerial skills and adopt attractive deposit interest rates to enhance deposit mobilization. Also, regulatory authorities should develop an improved capital assessment mechanism for banks in the country. Finally, government should provide an enabling banking environment for the provision of effective infrastructural facilities in order to enhance the operational efficiency of banks in Nigeria.
