Research Article
Capital Adequacy and Financial Performance of Listed Deposit Money Banks in Selected Sub-Sahara African Countries
Issue:
Volume 10, Issue 3, September 2025
Pages:
121-136
Received:
29 April 2025
Accepted:
13 May 2025
Published:
5 July 2025
DOI:
10.11648/j.ijafrm.20251003.11
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Abstract: Financial sustainability is essential in creating long-term value for companies and boosts stakeholders’ confidence. Capital adequacy is a global tool in resolving financial sustainability’s inefficiencies of Deposit Money Banks (DMBs). However, in Sub-Sahara African Countries (SSAC), DMBs financial performance has not been fully harnessed. While existing studies have explored various aspects of financial performance, limited attention has been given to the integration of capital adequacy mechanisms into operations of DMBs. Thus, this study examined the effect of capital adequacy on financial performance of listed deposit money banks in selected sub-Sahara African countries. The study adopted ex-post facto research design. The population comprised 42 DMBs listed on the exchange groups (Nigeria, Ghana, Rwanda, South Africa and Cote D’Ivoire) as at December 31, 2023. Inclusive criterion was employed to select a sample of 34 listed DMBs from the selected countries. Data were extracted from the financial statements of the selected banks for a period of 10 years (2014–2023). Findings revealed that capital adequacy had significant effect on return on equity (Adj.R2 = 0.01, F (4, 302) = 43.81, p < 0.05), and return on assets (Adj.R2 = 0.14, F (4, 302) = 154, p < 0.05) of listed deposit money banks in the selected SSAC. The study concluded that capital adequacy enhanced financial performance of listed deposit money banks in the selected sub-Sahara African countries. The board and management of listed deposit money banks should ensure adequate capitalization of their institutions, and efficient utilization of resources to further enhance financial performance.
Abstract: Financial sustainability is essential in creating long-term value for companies and boosts stakeholders’ confidence. Capital adequacy is a global tool in resolving financial sustainability’s inefficiencies of Deposit Money Banks (DMBs). However, in Sub-Sahara African Countries (SSAC), DMBs financial performance has not been fully harnessed. While e...
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Ogundajo Grace Oyeyemi
