IJRISS Logo

Ownership Structure and Financial Performance: Evidence from Nigerian Commercial Banks

Authors

Henry Habila

Department of Accounting, Federal University Wukari, Taraba State (Nigeria)

Samson Okpanachi Daniel

Department of Accounting, University of Jos (Nigeria)

Article Information

DOI: 10.47772/IJRISS.2026.100600708

Subject Category: Management

Volume/Issue: 10/6 | Page No: 10085-10096

Publication Timeline

Submitted: 2026-06-14

Accepted: 2026-06-19

Published: 2026-07-03

Abstract

This study examined Ownership Structure and Financial Performance: Evidence from Nigerian Commercial Banks. The target population for this study is all commercial banks licensed and regulated by the Central Bank of Nigeria (CBN). Secondary data were collected from audited annual financial statements and the Central Bank of Nigeria (CBN) annual banking supervision reports covering 15 listed commercial banks on the Nigerian Stock Exchange (NGX). This study employs panel data regression analysis. Four ownership structure dimensions state ownership, managerial ownership, institutional ownership, and foreign ownership were examined against four financial performance measures: return on assets (ROA), return on equity (ROE), net interest margin (NIM), and earnings per share (EPS). Panel data regression analysis was employed, with Hausman test results guiding the choice between fixed and random effects models. The findings reveal state ownership was found to negatively and significantly relate to net interest margin. Managerial ownership showed a negative association with both NIM and EPS. Institutional ownership negatively influenced ROA and foreign ownership exhibited a negative relationship with EPS. The study recommended that Regulatory authorities such as the Central Bank of Nigeria should encourage a reduction in excessive state ownership in commercial banks, as government dominance may lead to political interference, inefficiency, and weak profit orientation and Banks should reassess managerial ownership structures by limiting excessive insider shareholding, since managerial entrenchment can weaken accountability and reduce performance and The CBN should develop a comprehensive foreign ownership policy framework that balances the benefits of foreign capital and expertise with the need to protect domestic shareholder interests and ensure that earnings are not systematically repatriated at the expense of per-share value creation.

Keywords

Ownership structure, financial performance, Return on Assets (ROA), Return on Equity (ROE), Net Interest Margin (NIM), and Earnings Per Share (EPS).

Downloads

PDF JATS XML

References

1. Aburime, T. U. (2008). Determinants of bank profitability: Company-level evidence from Nigeria. SSRN Electronic Journal, 1(1), 3. [Google Scholar] [Crossref]

2. Adebayo, O. S., & Olufemi, F. J. (2020). Ownership structure and financial performance of listed deposit money banks in Nigeria. International Journal of Business and Management Review, 8(4), 45–58. [Google Scholar] [Crossref]

3. Aminu, Y., Mahmud, Z., & Zakari, M. A. (2015). Corporate governance and bank performance: A critical review of literature. International Journal of Business and Management Review, 3(1), 32–44. [Google Scholar] [Crossref]

4. Al-Janadi, Y. (2021). Ownership structure and firm performance in the Middle East: A meta-analysis. Journal of Risk and Financial Management, 14(12), 577. [Google Scholar] [Crossref]

5. Berger, A. N., Clarke, G. R. G., Cull, R., Klapper, L., & Udell, G. F. (2005). Corporate governance and bank performance: A joint analysis of the static, selection, and dynamic effects of domestic, foreign, and state ownership. Journal of Banking & Finance, 29(8–9), 2179–2221. [Google Scholar] [Crossref]

6. Bushee, B. J. (1998). The influence of institutional investors on myopic R&D investment behavior. The Accounting Review, 73(3), 305–333. [Google Scholar] [Crossref]

7. Central Bank of Nigeria (CBN). (2010). Annual report and statement of accounts. Central Bank of Nigeria. [Google Scholar] [Crossref]

8. Central Bank of Nigeria (CBN). (2014). Code of corporate governance for banks and discount houses in Nigeria. Central Bank of Nigeria. [Google Scholar] [Crossref]

9. Central Bank of Nigeria (CBN). (2019). Banking supervision annual report. Central Bank of Nigeria. [Google Scholar] [Crossref]

10. Central Bank of Nigeria (CBN). (2022). Banking supervision annual report. Central Bank of Nigeria. [Google Scholar] [Crossref]

11. Claessens, S., & Van Horen, N. (2014). Foreign banks: Trends and impact. Journal of Money, Credit and Banking, 46(1), 295–326. [Google Scholar] [Crossref]

12. Cooper, D. R., & Schindler, P. S. (2014). Business research methods (12th ed.). McGraw-Hill/Irwin. [Google Scholar] [Crossref]

13. Cornett, M. M., Marcus, A. J., Saunders, A., & Tehranian, H. (2007). The impact of institutional ownership on corporate operating performance. Journal of Banking & Finance, 31(6), 1771–1794. [Google Scholar] [Crossref]

14. Cuervo-Cazurra, A., Grosman, A., & Megginson, W. L. (2023). A review of the internationalization of state-owned firms and sovereign wealth funds: Governments’ nonbusiness objectives and discreet power. Journal of International Business Studies, 54(1), 78–106. [Google Scholar] [Crossref]

15. Dada, S. O., Ajayi, I. E., & Ayorinde, B. F. (2024). Ownership structure and bank performance in Nigeria. International Journal of Recent Advances in Multidisciplinary Topics, 5(5), 169–178. [Google Scholar] [Crossref]

16. Demsetz, H., & Villalonga, B. (2001). Ownership structure and corporate performance. Journal of Corporate Finance, 7(3), 209–233. [Google Scholar] [Crossref]

17. Emefiele, G. (2014). Corporate governance challenges in the Nigerian banking sector. Address at the Annual Bankers' Dinner, Lagos, Nigeria. [Google Scholar] [Crossref]

18. Elyasiani, E., & Jia, J. (2010). Distribution of institutional ownership and corporate firm performance. Journal of Banking & Finance, 34(3), 606–620. [Google Scholar] [Crossref]

19. Fama, E. F., & Jensen, M. C. (1983). Separation of ownership and control. Journal of Law and Economics, 26(2), 301–325. [Google Scholar] [Crossref]

20. Ferreira, M. A., & Matos, P. (2008). The colors of investors’ money: The role of institutional investors around the world. Journal of Financial Economics, 88(3), 499–533. [Google Scholar] [Crossref]

21. Fibriani, C. D., Islahuddin, I., & Zuraida, Z. (2022). The effect of government ownership, foreign ownership, managerial ownership, institutional ownership on financial performance with corporate governance as moderate in SOE companies. Journal of World Science, 1(9), 756–770. [Google Scholar] [Crossref]

22. Flamini, V., McDonald, C., & Schumacher, L. (2009). The determinants of commercial bank profitability in Sub-Saharan Africa (IMF Working Paper No. WP/09/15). International Monetary Fund. [Google Scholar] [Crossref]

23. Gillan, S. L., & Starks, L. T. (2000). Corporate governance proposals and shareholder activism: The role of institutional investors. Journal of Financial Economics, 57(2), 275–305. [Google Scholar] [Crossref]

24. Iannotta, G., Nocera, G., & Sironi, A. (2007). Ownership structure, risk and performance in the European banking industry. Journal of Banking & Finance, 31(7), 2127–2149. [Google Scholar] [Crossref]

25. Imam, R. S., Mustapha, L. O., & Irom, M. I. (2024). Ownership structure and firm value of industrial goods companies in Nigeria: Moderated by audit quality. International Journal of Research and Innovation in Social Science, 8(7), 2826–2837. [Google Scholar] [Crossref]

26. Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305–360. [Google Scholar] [Crossref]

27. Kajola, S. O. (2008). Corporate governance and firm performance: The case of Nigerian listed firms. European Journal of Economics, Finance and Administrative Sciences, 14(1), 16–28. [Google Scholar] [Crossref]

28. Kehinde, A., Ogbebor, I. P., & Ogboi, C. (2025). Ownership structure, firm size and corporate value of listed deposit money banks in Nigeria. Archives of Business Research, 14(4). [Google Scholar] [Crossref]

29. Kirimi, P. N., Kariuki, S. N., & Ocharo, K. N. (2022). Ownership structure and financial performance: Evidence from Kenyan commercial banks. PLoS ONE, 17(5), 301. [Google Scholar] [Crossref]

30. Lskavyan, V., & Spatareanu, M. (2006). Ownership concentration, market monitoring and performance: Evidence from the UK, the Czech Republic and Slovakia. Journal of Economics and Business, 58(2), 1–21. [Google Scholar] [Crossref]

31. Maryanti, E., & Dianawati, W. (2024). Ownership structure and performance: How does business environmental uncertainty matter? Cogent Business & Management, 11(1), 2396540. [Google Scholar] [Crossref]

32. McConnell, J. J., & Servaes, H. (1990). Additional evidence on equity ownership and corporate value. Journal of Financial Economics, 27(2), 595–612. [Google Scholar] [Crossref]

33. Morck, R., Shleifer, A., & Vishny, R. W. (1988). Management ownership and market valuation: An empirical analysis. Journal of Financial Economics, 20, 293–315. [Google Scholar] [Crossref]

34. Nigerian Stock Exchange (NGX). (2022). NGX factbook. The Nigerian Stock Exchange. [Google Scholar] [Crossref]

35. Ojeyinka, T. A., & Matemane, M. R. (2024). Do board characteristics affect the interplay between managerial ownership and firm performance? Evidence from South African banks. African Journal of Business and Economic Research, 19(3), 295–320. [Google Scholar] [Crossref]

36. Olatunji, T. E., Akanbi, T. A., & Bakare, S. B. (2025). The effect of ownership structure on the financial performance of listed deposit money banks in Nigeria and Ghana. International Journal of Economics and Financial Management, 10(10), 98–109. [Google Scholar] [Crossref]

37. Pound, J. (1988). Proxy contests and the efficiency of shareholder oversight. Journal of Financial Economics, 20(1), 237–265. [Google Scholar] [Crossref]

38. Rygh, A., & Benito, G. R. G. (2022). Governmental goals and the international strategies of state-owned multinational enterprises: A conceptual discussion. Journal of Management and Governance, 26(4), 1155–1181. [Google Scholar] [Crossref]

39. Sanda, A., Mikailu, A. S., & Garba, T. (2005). Corporate governance mechanisms and firm financial performance in Nigeria (AERC Research Paper No. 149). African Economic Research Consortium. [Google Scholar] [Crossref]

40. Sanusi, L. S. (2010). The Nigerian banking industry: What went wrong and the way forward. Address delivered at the Convocation Ceremony, Bayero University, Kano. [Google Scholar] [Crossref]

41. Securities and Exchange Commission Nigeria (SEC). (2022). Annual report. Securities and Exchange Commission. [Google Scholar] [Crossref]

42. Shleifer, A., & Vishny, R. W. (1986). Large shareholders and corporate control. Journal of Political Economy, 94(3), 461–488. [Google Scholar] [Crossref]

43. Shleifer, A., & Vishny, R. W. (1997). A survey of corporate governance. Journal of Finance, 52(2), 737–783. [Google Scholar] [Crossref]

44. Soludo, C. C. (2004). Consolidating the Nigerian banking industry to meet the development challenges of the 21st century. Address to the Special Meeting of the Bankers' Committee, Abuja. [Google Scholar] [Crossref]

45. Suriawinata, I. S., Prastuti, D., & Hermastuti, P. (2023). Banks’ core deposits and net interest margin: Do size and ownership structure matter? Jurnal Keuangan dan Perbankan, 27(3), 360–372. [Google Scholar] [Crossref]

46. Syafik, M. (2025). The effect of institutional ownership and foreign ownership on company performance. Journal of Economics and Business (JECOMBI), 6(3), 211–223. [Google Scholar] [Crossref]

47. Uadiale, O. M. (2010). The impact of board structure on corporate financial performance in Nigeria. International Journal of Business and Management, 5(10), 155–166. [Google Scholar] [Crossref]

48. Nwude, E. C., Zakirai, M. S., & Nwude, C. A. (2023). Ownership structure and bank performance in emerging market economy: Evidence from Nigerian listed deposit money banks. SAGE Open, 13(4). [Google Scholar] [Crossref]

49. Uwuigbe, U., Olusanmi, O., Uwuigbe, O. R., Peter, D. S., & Jinadu, O. (2018). Ownership structure and financial performance of listed banks in Nigeria. Banks and Bank Systems, 13(1), 27–35. [Google Scholar] [Crossref]

50. Victor, A. M., Ukpeh, G. I., & Obialor, D. C. (2024). Ownership structure and financial performance of listed commercial banks in Nigeria. World Journal of Finance and Investment Research, 8(3), 55–74. [Google Scholar] [Crossref]

51. Yi, Y., Yao, Q., & Su, W. (2024). Foreign ownership, subjective willing, and internal control level. Heliyon, 10(12), e32970. [Google Scholar] [Crossref]

52. Yusuf, B. S., Okpe, J. U., & Muhammad, M. M. (2024). A moderating effect of financial performance in a relationship between ownership structure and firm performance of listed commercial banks in Nigeria. Journal of Investment and Management, 13(2), 25–37. [Google Scholar] [Crossref]

Metrics

Views & Downloads

Similar Articles