The relevance of banking sector in an economy is defensible for the fact that it is the foremost channel of savings and its allocations to various economic units. Banks are characterized by some unavoidable variables, for this study, they are capital, loans and advances and liquidity. It is therefore assumed that banking business, especially the deposit money banks in Nigeria cannot financially perform satisfactory without these variables in place. The objective of this study is to examine the impact of these characteristics on profitability. The study adopts ex-post facto research design and secondary source data drawn from the financial statements of the selected banks were used. Regression analysis was adopted in analyzing the data. The findings of the study show that bank capital, loan and advance have a significant relationship with earnings but liquidity is not during the period of study. The study recommends that the Nigerian banks’ regulatory authorities should focus and continue to regulate banks’ capitals as necessary with a view to improving the profitability of deposit money banks in Nigeria, the management of deposit money banks, should develop credits policies that will always be in agreement with the CBN’s policies on credits and CBN should review the liquidity requirements with a view to investing idle liquidity to encourage earnings.
Keywords: Bank capital, Earnings, Liquidity, loans and advances
