Determinants of Survival of Listed Deposit Money Banks in Nigeria

Abstract

In the business world, stakeholders are subject to several risks on investment including losing their venture. The existence of a healthy corporate structure is vital to the pursuit of the going concern objective of firms. This study investigates determinants of listed Deposit Money Banks’ (DMBs) survival in Nigeria. The sixteen listed DMBs in Nigeria as at December 2017 were used as the population and fifteen were sampled by applying a judgemental sampling technique. The study adopted descriptive and ex-post facto research design. The Emerging Market score (EM score) model was applied in the prediction of going concern status of sampled DMBs. The data used were obtained from the annual reports and accounts of the DMBs for 2007 to 2017 accounting periods. The data were analysed using Robust GLS Regression model. The study found that there is a positive and significant impact of liquidity, leverage, profitability, solvency and asset management on DMBs’ going concern (GC). This implies that, any increase in these determinants would lead to increase in GC of DMBs. With the adjusted r2 of 0.98 and F-value significance at 0.000 from the model used in the study, the study concludes that the independent variables in the EM score model are relevant in determining the GC of DMBs. It is highly recommended that DMBs should enhance their survival status (EM score of 5.48) by improving on their liquidity, profitability, solvency, leverage and asset management ratios to solidify their GC status.

Keywords: Asset Management, EMscore, Leverage, Liquidity, Profitability, Share Price, Solvency


Article Review Status: Published

Pages: 20-40 (Download PDF)

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