Effect of Ownership Structure on the Failure of Listed Commercial Banks in Nigeria

Abstract: Longstanding poor performance among the banks in Nigeria aroused uncertainty of the effect of bank ownership structure on the stability of banks, despite the reforms that visibly occurred in the banking system. This paper investigated the ownership structure (that is managerial ownership and foreign ownership) impact on the failure of listed commercial banks in Nigeria. The research design used in the study comprised an ex post facto. The study used 14 listed commercial banks in Nigeria as its population. There were 12 listed banks in a given sample. The secondary data were obtained by the use of published annual reports between 2013 and 2023. The analysis was performed based on descriptive statistics, correlation, and pooled Ordinary Least Squares (OLS) regression on STATA version 17. The results indicated that presence of complete managerial ownership and foreign ownership in Nigeria definitely reduces the chances of failure in the commercial banks. Study found that participation of equity through managers and foreign investor improves the situation of governance and declinesumberment of finances. It suggests that the Central Bank of Nigeria (CBN), secure exchange commission (SEC) and the Nigerian investment promotion commission (NIPC) must formulate policies that would enhance performance-based owner managership and embracing effective administration by foreign investors to make banks stronger and resilient in Nigeria.