EVALUATION OF CAPITAL ADEQUACY IN NIGERIA COMMERCIAL BANKS: A CASE STUDY OF SOME SELECTED BANKS

📄 Project Abstract

This project evaluates the level of capital adequacy of three Nigeria commercial banks including the Union Bank of Nigeria Plc, First Bank of Nigeria Plc and Oceanic Bank International Plc from year 2003 to 2007. It delves into the theoretical framework of capital adequacy by reviewing development in the international capital standards (the Basel I and Basel II accords) for banks, their controversies and prospects in line with effective banking supervision. This work employs the tier I risk-base, total risk-base, leverage capital models, correlation coefficient and regression techniques to reveal that the three evaluated banks are well capitalized and at the same time exhibited dwindling quality of earnings with increase in capital positions in general for the studied periods. Consequently, we recommend a certain percentage of different capital ratios the individual bank should strive to maintain to remain well capitalized and achieve an optimum return on assets invested; that the bank...