Effect of Capital Adequacy Ratio (CAR) on Profitability of Deposit Money Banks (DMB’s): A Study of DMB’s with International Operating License in Nigeria

Ajayi, Samuel Olatayo, Ajayi, Henry Folusho, Enimola, Dare Joseph, Orugun, Fausat Ibidunni

Abstract


The study examined the Effect of Capital Adequacy Ratio (CAR) on Profitability of Deposit Money Banks (DMB’s) as obtained from their annual report for 2017 using their Return on Assets (RoA) as Profitability parameter. OLS method was used via SPSS 20.0 to run the data used in the research with findings that; there exist a strong positive relationship between CAR and ROA of Deposit Money Banks (DMB’s) in Nigeria and recommends that the banks’ regulators should not only focus on Capital Adequacy but also on strategic monitoring and evaluation to maintain banks’ financial strength and stability in Nigeria.

Keywords: Capital Adequacy Ratio (CAR), Profitability, Deposit Money Banks (DMB’s)

DOI: 10.7176/RJFA/10-10-10

Publication date:May 31st 2019


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ISSN (Paper)2222-1697 ISSN (Online)2222-2847

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