1 Department of Banking and Finance, Nasarawa State University, Keffi, Nigeria.
2 Department of Security and Strategy Studies, Nasarawa State University, Keffi, Nigeria.
3 Technology Building, Nigeria Immigration Service, Abuja, Nigeria.
Review Article
World Journal of Advanced Research and Reviews, 2022, 16(02), 145–155
Article DOI: 10.30574/wjarr.2022.16.2.1131
Received on 26 September 2022; revised on 31 October 2022; accepted on 03 November 2022
Placement of funds on the capital market could be confounding particularly when the market is unreadable in a blurred investment macroclimate riddled by unethical practices of all dimensions which naturally renders traditional financial indicators blinded. This study investigates effect of financial performance indicators on share prices of the thirteen listed commercial banks in Nigeria within the periods of 2010 to 2020. Net interest margin, economic valued added and free cash flow are the exogenous variables that proxy financial performance indicators. Study employs panel ordinary least squares because of the homogeneity nature of the cross sectional and time series data under observation while the Hausman test suggested random effect testing. Findings from the study revealed that while Free Cash flow has a positive significant effect, both economic value added and net interest margin have negative significant effect on share prices of listed money deposit banks in Nigeria. Study therefore recommends that Central Bank of Nigeria, policy makers in the financial circle, professional bodies and the academia to project financial indicators that are futuristic with demands for economic sustainability beyond profitability. This study also recommends that listed commercial banks should be more creative and innovative with value added products to scale up their interest incomes sources since investors’ appetite to safeguard funds cannot be over emphasized.
Economic Value added; Financial Performance Indicators; Free Cash Flow; Net Interest Margin
Preview Article PDF
ONIBIYO Ezekiel Rotimi, NWALA Nneka, MUNGADI Dauda Danladi, ADEKOLA Nurudeen O, AMINU Bashir and SHITTU Hakeem B. Effect of financial performance indicators on share price of listed commercial banks in Nigeria. World Journal of Advanced Research and Reviews, 2022, 16(2), 145-155. Article DOI: https://doi.org/10.30574/wjarr.2022.16.2.1131