Determinants of Banks’ Profitability in a Developing Economy: Evidence From Nigeria

!e unimpressive banks’ performance in Nigeria over the last decade has remained a source of concern for all and sundry. !is study investigates the e"ects of bank capital, bank size, expense management, interest income and the economic condition on banks’ pro#tability in Nigeria. !e #xed e"ects regression model was employed on a panel data obtained $om the #nancial statements of 20 banks $om 2006 to 2012. !e results indicate that improved bank capital and interest income, as well as e%cient expenses management and favourable economic condition, contribute to higher banks’ performance and growth in Nigeria. !us, government policies in the banking system must encourage banks to regularly raise their capital and provide the enabling environment that will accelerate economic growth in the country. Bank management must e%ciently manage their portfolios in order to protect the long run interest of pro#t-making.