Bank's Capital Reform, Size and Performance: The Nigerian Experience

Capital reform in the banking industry is a common phenomenon across the globe and the financial environment in Nigeria is not an exception. This study employs financial ratios to measure a sample of commercial banks (14) performance in the period 2007-2011. We found that the performance of the banks fluctuates across the period. The mean performance of profit indicators shows that the net interest margin for all banks ranges between 3.9-6% but only 9 banks made a net interest margin > 5%. In respect of return on capital employed by the banks, mean performance ranges between -24.9-22% and 7 banks made a return on capital employed > 10%. For return on assets, the performance range was between -8.02-3.59% and only 8 banks had a returned on total assets > 1%. And for asset growth, the mean growth rate of assets for the period of the study ranges between 4-33% but 10 banks grew their asset at a rate >10%. Finally, we found that size does not matter in the performance of the sample banks