AN EMPIRICAL ASSESSMENT OF FINANCIAL PERFORMANCE ANALYSIS INLISTED MONEY DEPOSIT BANKS IN NIGERIA

Abstract

This study empirically assessed the financial performance of listed money deposit banks in Nigeria,
focusing on the effect of deferred tax assets (DFTA) intensity on earnings per share (EPS) and market
price per share (MPS). Employing an ex post facto research design, the study utilised secondary panel
data from the annual reports of all sixteen listed deposit money banks on the Nigerian Exchange Group
spanning an eleven-year period (2013–2023). Purposive sampling was applied to include only banks with
complete and verifiable data for the variables of interest. Descriptive statistics, correlation analysis, and
panel regression techniques were used to analyze the data. The Hausman test guided the selection of the
random effects model as most appropriate for estimating the functional relationships in the study.The
findings indicate that deferred tax assets intensity had negative but statistically insignificant effects on
both EPS and MPS, with coefficients of -38.65 (p = 0.131) and -3.45 (p = 0.6447), respectively.
Correlation analysis showed a weak positive relationship between DFTA and EPS, and minimal
association with MPS, while EPS and MPS exhibited strong positive correlation. The results suggest that
variations in deferred tax assets do not meaningfully influence profitability or market valuation of the
sampled banks.Based on these results, the study concludes that increasing deferred tax assets intensity
will not significantly stimulate stock returns of Nigerian listed banks. It recommends that banks may
cautiously manage DFTA without expecting substantial immediate effects on stock returns. The study
contributes to knowledge by providing current empirical evidence on the relationship between deferred
tax assets and financial performance of Nigerian banks, filling a gap in the literature on capital intensity
and stock returns