DETERMINANTS OF CAPITAL STRUCTURE OF BANKS IN NIGERIA

Abstract
This study investigates the determinants of capital structure in the Nigerian banking sector. The association between a bank capital structure and its size, growth, profitability and tangibility was established. Data were collected from the 15 banks listed on the Nigerian Stock Exchange (NSE) from the financial year 2002 to 2011. The ordinary least square technique was adopted in analyzing the data collected. The results showed that (1) the size and tangibility of a bank has a positive and significant relationship with capital structure (2) capital structure has a negative and insignificant relationship with growth of a bank and (3) profitability has a negative and insignificant relationship with capital structure. Based on these results, some recommendations were made prominent amongst which was that banks quoted on the NSE should emphasize increase in their net assets (size), since bigger banks are more likely to have more financing options.