ABSTRACT

This research examined the relationship between ownership structure and financial performance of firms in Nigeria. The analysis empirically collected panel data from 13 deposit money banks listed on the Nigerian Exchange Group (NGX), for a period of five (5) years, spanning 2019 to 2023, employing information obtained from their yearly audited financial report. Ownership structure: ownership concentration, institutional ownership, managerial ownership and foreign ownership were used as independent variables. The study assessed firm's  financial performance through a Composite index which include Return on Asset (ROA) and Return on Equity (ROE). Multi regression technique using ordinary least square (OLS) estimation was employed in analysing the data. The findings showed that both ownership concentration and foreign ownership have a positive and significant effect on Financial Performance (PERF). However, managerial and institutional ownership exhibited a negative and insignificant impact on financial performance. Based on this findings, the study recommends firms in Nigeria, most especially deposit money banks in the financial sector to encourage foreign shareholdings as it will lead to acquisition of resources necessary for improved performance. It also recommends that regulatory bodies like CBN, NDIC and SEC enforce a reasonable level of ownership concentration for better performance. Also policies be put in place involving setting limits on the amount of stocks that managers own. Finally, the study recommends that regulation be implemented to encourage more foreign institutional ownership over domestic institutional ownership in Nigerian firms in order to create an optimum ownership structure that leads to increased Financial Performance.