Bank Capitalization and Cost of Equity on Profitability of Nigeria Deposit Money Banks – General Moment Approach

The recapitalization of the capital base of banks in 2005 constituted the first phase of the reform policy in the entire banking sector of the Nigerian economy. The key elements in the agenda included minimum capital base of N25 billion with a deadline of 31 st December, 2005. Most of the banks were able to meet the deadline through mergers and acquisitions amongst other alternatives. This paper examines the trend and the effects of bank recapitalization on deposit money banks in Nigeria in terms of performance and more specifically profitability and cost of equity. The data used for this study were processed using Paired Sample test technique for difference between two periods before and after the recapitalization era in addition to the E-view electronic packages. The test of difference of mean helped us