Effect of Financial Stability on Performance of Commercial Banks in Nigeria:- Chinenye, Ruth A

ABSTRACT

The study examined the effect of financial stability on performance of commercial banks in Nigeria. The study period covered from 2010 to 2021.. The study adopted ex-post facto research design. The data was sourced from five selected commercial banks namely Access Bank Plc, First Bank Plc, Eco Bank Plc, Union Bank Plc and Zenith Banks Plc. The stated hypotheses were analysed with panel regression model . The findings of the study revealed that Capital adequacy ratio (CAR) has positive and significant effect on the return on asset of the selected commercial banks in Nigeria, Leverage ratio (LEV) has negative and insignificant effect on the return on asset of the selected commercial banks in Nigeria, Liquidity ratio (LIR) has positive and significant effect on the return on asset of the selected commercial banks in Nigeria and Bank size has positive but insignificant effect on the return on asset of the selected commercial banks in Nigeria. It is recommended that management of the commercial banks should always work toward the accepted capital adequacy ratio required by the apex bank in the country.