European Journal of Accounting, Auditing and Finance Research (EJAAFR)

EA Journals

Return on Asset and Net Interst margin

CAPITAL STRUCTURE AND BANK PERFORMANCE – EVIDENCE FROM SUB-SAHARA AFRICA (Published)

This paper seeks to examine the relationship between capital structure and bank performance in Sub-Sahara Africa. This study has employed the use of panel data techniques to analyze the relationship between capital structure and bank performance. The performance variables used in the study were return on asset (ROA), Return on equity (ROE) and net interest margin (NIM). The results from Levin-Lin-Chu and Im-pesaran-shin unit root test show that all the variables were stationary in levels. The study hypothesized negative relationship between capital structure and bank performance. The results also indicate that capital structure does not determine bank performance but rather it is performance that determines banks capital structure.

Keywords: Capital Structure. Bank performance, Return on Asset and Net Interst margin, Return on Equity, Total debt ratio

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