Corporate Restructuring and Corporate Performance in Nigeria: Insights from the Banking Sector

Corporate restructuring, in its simplest form, can be described as the process of changing the structure (managerial, financial, etc.) of a business organization to enhance its performance. The bank capital reform of 2005 which increased minimum equity capital to #25 billion from its previous value of #2 billion drastically changed the structure of banking business in Nigeria through mergers and acquisitions. The reform led to the emergence of 25 banks from the 89 that hitherto existed. Based on historical data on bank performance, this study was designed to determine if the reform significantly impacted the post-implementation performance of banks. Panel data from a sample of 5 banks for the period 1996-2016 was analyzed using the random effects model. The focus of the research was to determine if bank performance (represented as return on assets and return on equity) differed significantly between pre- and post-implementation periods. The result showed no significant difference in return on assets before and after the merger and acquisition exercise. However, with regard to return on equity, there was strong evidence that profit performance of banks differed between the periods.