JOSEPH KASE
Department of Accountancy,
Akawe Torkula Polytechnic,
Makurdi, Benue state.
e-mail: [email protected]
ABSTRACT
This study examined the effect of ownership structure (proxied by managerial ownership, institutional ownership and foreign ownership) on profitability (proxied by ROA) of selected Deposit Money Banks in Nigeria for the period 2011-2019. The study adopted the correlation research design. Secondary data were extracted from the annual reports of selected banks and were analyzed using panel multiple regression analysis. From the analysis, the study revealed that managerial ownership and foreign ownership significantly affect profitability of listed Deposit Money Banks in Nigeria. The study however found that institutional ownership does not significantly affect financial performance of listed Deposit Money Banks in Nigeria. The study therefore recommended that Managerial ownership should be discouraged in Deposit Money Banks in Nigeria. This is necessary as large ownership of shares by managers can cause severe agency conflict where managers may tend to manage the organization in a way as to gain high yield on their shares to the detriment of other stakeholders. Furthermore, concentration of shares in the hands of foreign shareholders gives avenue for harnessing foreign ideas that can propel improved profitability of Deposit Money Banks in Nigeria.
Keywords: Ownership Structure, Profitability, Managerial Ownership, Institutional Ownership and Foreign Ownership