Capital Structure and Performance of Listed Banks in Ghana
In this paper, we empirically investigate the relationship between capital structure or leverage and performance of listed bank in Ghana from 2000 to 2010. Data was collected from Ghana stock exchange and annual report of the listed banks. Panel regression methodology was used to analyse the data. The result revealed that the banks listed on the Ghana Stock Exchange are highly geared and this is negatively related to the banks performance. The study shows that there is high level gearing among listed banks. This can be attributed to their over dependency on short term debt as a result relatively high Bank of Ghana Lending rate and low level of bond market activities.The regression result also revealed that capital Structure is inversely related to performance of the listed bank in terms of return on Equity and Tobin’s q.
