THE IMPACT OF BANK SIZE ON FINANCIAL PERFORMANCE: EVIDENCE FROM QUOTED COMMERCIAL BANKS IN NIGERIA USING PANEL DATA

This study investigated bank size and financial performance of quoted commercial banks in Nigeria for the period 2014-2023. The study employed ex post facto and correlational research design and the population comprised of all banks quoted on the Nigerian Exchange Group for the period under review. The sample consisted of ten (14) banks after data filtration using simple random sampling technique. The study collected data from secondary sources mostly the sampled banks financial statements. The secondary data obtained was analysed with using panel data Ordinary Least Square Methods. R-square, adjusted R-square, regression coefficient, Durbin Watson, F-statistic and F-probability was used to study the effect of bank size on financial performance. From model one; the study found that 75.1 and 67.1 percent variation in earnings per share was traced to banks size, bank assets size, bank deposit size and bank capital size have positive effect on earnings per share while bank loan size have negative effect on the return on assets of the quoted commercial banks. From model two, the study found that 66.4 and 53.9 percent variation in return on equity was accounted for by bank size. However, beta coefficient of the variables found that all the independent variables have positive effect on the return on equity of the quoted commercial banks. From the findings, the study conclude that bank size have significant effect on financial performance of the quoted commercial banks. It recommend that Commercial banks in Nigeria should improve their size of assets focusing more on earnings assets, reduce investment in nonearning assets but increase level of capitalization and ensure assets and liability management that affect financial performance positively. The quoted commercial banks should minimize their operational cost efficiency, increase capital adequacy and increase over sight in factors that capital composition and increase gearing ratio because excess expenditure does have negative and significant impact on banks performance and the banking institutions should ensure adequate deposit mobilization and minimize their non-performing loans through appropriate credit policies and procedures and consider other quantitative and qualitative approaches of profit improvement than bank size