Title: Corporate Restructuring And Financial Performance Of Commercial Banks In Delta State
Authors: OTOBO, P, OLANNYE, A.P, OSUJI, C.C
Volume: 9
Issue: 6
Pages: 279-292
Publication Date: 2025/06/28
Abstract:
This study evaluated the effect of corporate restructuring on financial performance of selected commercial banks in Nigeria for the period of 15 years ranging from 2009-2023. Specifically, the study disaggregates corporate restructuring into capital restructuring, leadership restructuring, asset restructuring and debt restructuring. To answer the research questions, data were collected on twenty (20) quoted commercial banks drawn from a population of listed commercial banks on the Nigerian Exchange Group Plc as at 31st December, 2023. The study adopted the panel data estimation technique. However, to choose the most appropriate model, the Hausman test was conducted. The result proved that, the Random Effect Model is the most appropriate panel data variant. To ensure that the regression results are fit for policy formulation, the model was subjected to some preliminary analysis. These include: multi-collinearity test, normality test; Ramsey reset test, and Heteroskedasticity test. Evidently, the preliminary analysis proved that, the model is free from multicollinearity problems, normally distributed, well-specified, and Homoskedastic. The study reported that, capital restructuring does have significant effect on financial performance of selected commercial banks in Delta State, leadership restructuring does have significant effect on financial performance of selected commercial banks in Delta State, assets restructuring does have significant effect on financial performance of selected commercial banks in Delta State and debt restructuring does have significant effect on financial performance of selected commercial banks in Delta State. Hence, the study concludes that, corporate restructuring practices have significant effect on the performance of commercial banks in Nigeria. The study further recommends that commercial banks should reduce their increase collection period in order to improve their financial performance. The need to improve their operations through improved processes, institutional capacity building and institutional innovation, as well as coming up with new services to increase their market share and therefore capture a wider customer base. The study contributed to the ongoing debate on the need for business to adopt corporate restructuring approach.