Privatization and Financial Performance (Earnings per share) on Selected Money deposit Banks in Nigeria (1980-2015)

Author(s)

R.W. Oladiran ,

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Volume 8 - September 2019 (09)

Abstract

The abysmal performance of state owned public enterprises due to the government bureaucracy coupled with corruption has become worrisome to the government and the public. Therefore, economic reforms such as privatization, commercialization and liberalization were carried out to address the aforementioned in federal government establishments. This study investigated the impact of privatization on financial performance of selected DMBs in Nigeria. The study employed ex-post facto research design. Three banks were chosen from the target population of nine privatized deposit money banks, namely, FBN Plc, UBA Plc and UBN Plc. Secondary data were used, while the pre and post diagnostic tests coupled with descriptive statistics and panel regression analysis were carried out. The findings revealed that privatization component (Percentage of share privatized, Age of bank, No of Directors, Incremental asset size and Leverage) had significant impact on EPS (Adj. R2 = 0.731, F(5, 30)= 20.085, p<0.05) of selected DMBs in Nigeria after privatization. The study concluded that privatization affected financial performance of selected deposit money banks in Nigeria. The study hereby recommended that the country’s corruption level must be relatively low to enable the government record a huge success of the programme

Keywords

Commercialization, Deposit money banks, Federal-owned enterprises, Performance, Privatization

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