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FACTORS AFFECTING THE CAPITAL STRUCTURE OF COMMERCIAL BANKS LISTED ON THE NIGERIAN STOCK EXCHANGE

A b s trac t

This study indicates the factors affecting the capital structure of Commercial banks listed on Nigerian Stock Exchange over the period 2017 – 2021 of 16 commercial banks. This study use OLS model, FE model, RE model and Hausman test to select the suitable estimation methods. The capital structure in this case represents the debt ratio of the bank. Bank size, profitability ratio, growth rate of bank, income tax, business risk, liquidity, growth rate of the economy, inflation rate are variables included in the model to study the effect on commercial bank’s capital structure. The results show that the bank size, the growth rate of the economy, the inflation have the positive relationship, while the profitability ratio, the growth rate of the bank show the negative relationship. It means that if the explanatory variable in the model increase, the bank will increase its liabilities for variables showing a positive relationship and vice versa. Through discussion, there are many studies that come to similar conclusions.  

Keywords: Capital structure, Com m ercial bank, Banking, Nigerian

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