How is Size Related to Profitability? Post-Consolidation Evidence from Selected Banks in Nigeria

Funso T. Kolapo, Lawrence B. Ajayi and Olufemi A. Aluko
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Funso T. Kolapo: Department of Banking and Finance, Ekiti State University
Lawrence B. Ajayi: Department of Banking and Finance, Ekiti State University
Olufemi A. Aluko: Department of Finance,University of Ilorin, Ilorin

International Journal of Finance & Banking Studies, 2016, vol. 5, issue 4, 30-38

Abstract: It is theoretically believed that increase in firm size would resultto increase in firm profitability. Therefore, this study examines the relationship between size and profitabilityof six banks in Nigeria after the 2005 consolidation exercise. The measure of profitabilityis return on assets. Employing the static panel data regressionmethod, the study found that size has an insignificant negative relationship with bank profitability. Thisstudy concludes that the 2005 consolidation exercise did not enhancetheprofitabilityof the selected banks.

Keywords: Size; Bank Performance; Return on Assets; Consolidation; Nigeria (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (3)

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