Impact of Bank-Specific Factors on Capital Adequacy in the Nigerian Banking Sector: An Empirical Analysis

The study investigates the divergence between the capital adequacy of banks in Nigeria and the Bank for International Settlements' (BIS) global standards for bank capital adequacy. It specifically examines the factors affecting capital adequacy in Nigerian banks. The main objective is to evaluate how specific factors impact capital adequacy within this context. Data spanning from 2012 to 2022 from the Central Bank of Nigeria's Statistical Bulletin was collected for 13 selected deposit money banks in Nigeria. Econometric methods were employed to analyse this data. The findings indicate that asset quality and return on equity (ROE) adversely affect the capital adequacy of Nigerian deposit money banks during the study period. Conversely, bank liquidity, bank size, management efficiency, non-performing loans, and return on assets positively influence bank capital adequacy in Nigeria. It is recommended that particular attention be given to bank liquidity and bank size, as these factors significantly enhance the capital adequacy of Nigerian banks within the reviewed of period