Author(s): Godswill Osagie Osuma, Ochei Ailemen Ikpefan, Alexander Ehimare Omankhanlen
Measurement of financial institutions performance has been done with the use of certain Key Performance Indicators (KPIs) such as liquidity ratio, profitability ratio, asset quality of the bank, capital adequacy amongst others. The study therefore, adopted a two-stage methodological approach (non-parametric and regression analysis) with the help of Microsoft excel solver and EViews to analyze the efficiency and performance of eleven (11) listed deposit money banks. The study made use of three (3) inputs (total deposit, total asset, and operating expenses) and three (3) outputs (net interest income, loans and advances, and gross earnings) for the deposit money banks. From the data envelopment analysis, the study found that Eco Bank, Access Bank, First City Monument Bank, Fidelity Bank, Guarantee Trust Bank, Sterling Bank, Unity Bank, Wema Bank, were efficient at all envelopment models. At the same time, United Bank for Africa, Zenith Bank and Union Bank were not fully efficient at all envelopment models despite their profitability. From the profitability model, the study found that industry-specific variables were positive and statistically significant at 0.005 level of significance. The study concludes that big or large financial disclosures accrued to financial institutions does not secure its improved efficiency level which could metamorphose into financial stability. The result of this study has made it clear that efficiency is a better measure of performance than profitability as some deposit money banks were not efficient, but profitable, also a huge total asset is not directly proportional to an efficient financial institution; therefore, management of banks should introduce effective and cost efficient strategies as part of their strategic decisions.