Financial Sustainability And Stock Prices Of Deposit Money Banks In Nigeria
Essien, E. Akpanuko
Department of Accounting, Faculty of Management Sciences, University of Uyo, Akwa-Ibom State
Etim, O. Etim
Department of Accounting, Faculty of Management Sciences, University of Uyo, Akwa-Ibom State
Akporien, Olum Fidelis
Department of Accounting, Faculty of Management Sciences, University of Uyo, Akwa-Ibom State
Keywords: Financial sustainability, Long-term Liability, Capital Adequacy, Operational Efficiency, Stock Market Prices
Abstract
This study was carried out to examine the relationship between financial sustainability and stock market prices of listed Deposit Money Banks in Nigeria. The study, anchored on the Theory of Profit, adopted the correlational and longitudinal research approach. The population of the study consisted of all DMBs in Nigeria. Panel data were collected from annual report of sampled DMBs and analysed using descriptive statistics and multivariate regression. The study adopted three independent variables as measures of financial sustainability namely: capital adequacy, operational efficiency and long-term liabilities. Findings of the study showed that capital adequacy has a significant positive relationship with stock market prices of listed DMBs in Nigeria. The study also finds a positive but not significant relationship of operational efficiency and long-term liquidity with stock market prices of listed DMBs in Nigeria and concludes that corporate financial sustainability enhances the stock market prices of listed Deposit Money Banks in Nigeria. The study therefore recommends amongst others that listed DMBs should establish capital adequacy measures that clearly outline the management’s view of organization priorities on financial sustainability