An Evaluation of Bank's Capital Structure Determinant in a Depressed Economy

There is no doubt that the banking sector. Plays a significant role in the economy of Nigeria. Banks should choose and adjust their strategic mix of securities  in order to maximize the value of the firm and ensure that their operations are not either highly geared or too lowly geared in order to achieve optimum capital structure.

Thus, the determination of appropriate capital requirement and sources of raising funds are highly important.
This is because, finance represent all heart of all businesses. Lack of adequate capital has always been identified as the major causes of business Failure .In Nigeria, banking industry is regulated By central bank of Nigeria. At present, minimum capital requirement for commercial bank that intends to be in operation is N25 Billion. In order to raise capital backs need to mix both debt and equity strategically for the purpose of achieving an optimum capital structure.

In Nigeria, banks have not lived up to expectation of achieving optimum structure. If this is not achieved, it is at the peril of both the providers of capital and the firm itself.
This study therefore focuses on how Nigeria banks can choose appropriable mix of debt and equity capital in order to achieve optimum on capital structure. This is achieved by looking at the factors that determine capital structure in order to protect interest of providers of capital ensure payment of dividend, enable bank to use gearing benefit in optimizing return of investment and to enhance the firms ability to raise new fund.