COUNCIL MEMBERS Alhaji Shehu Usman Ladan, B.Sc. (Hons), MBA,mni, FCNA, CPA - President/Chairman of Council Professor Mohammad Akaro Mainoma, Ph.D, FCNA, CPA - 1st Vice President Professor Benjamin C. Osisioma, Ph.D, FCNA - 2nd Vice President Mr. Anthony Chukwuemeka Nzom, MBA, FCNA, CPA - Immediate Past President Mr. James Ekerare Neminebor, HND, B.Sc. (Hons), MBA, FCNA - Treasurer Hajia Zuwaira Kishimi, B.Sc. (Hons), MBA, FCNA - Member Secretary Dr. Nuruddeen A. Abdullahi, Ph.D, mni, FCNA - Member Mr. Johnson Oludeinde Oluata, B.Sc. (Hons), ACIArb, CFE, FCNA - Member Mr. Audu Hassan Ohida, HND, MBA, FCNA - Member Mr. Anthony N. Kalu, FCNA - Member Alhaji Abubakar Ali Hina, MBA, FCNA - Member Alhaji Mohammed Lawal B. Maru, B.Sc., MBA, FCNA - Member Mrs Maureen Chikwalumuzor Eboka, B.Sc.,MBF, FCNA - Member Mr. Babajide Ibrahim Awe Agboluga, MBA FCNA - Member Mr. Ibrahim Maren Makut, HND, MBA, FCNA - Member Past Presidents Chief (Dr.) Johnson Kolawole Odumeru, FCNA - 1996 - 2001 Mr. Sunday Babalola Aloba, FCNA (Late) - 2001 - 2003 Alhaji Umar Hamid, FCNA - 2003 - 2005 Prof. Edet Robinson Iwok, Ph.D, FCNA (Late) - 2005 - 2007 Dr. Samuel Okwuchukwu Nzekwe, FCNA - 2007 - 2009 Chief (Mrs) Francess Iyamide Gafar, FCNA - 2009 - 2011 Hajia Maryam Ladi Ibrahim, B.Sc. (Hons), FCNA - 2011 - 2013 Alhaji (Dr.) Sakirudeen Tunji Labode, FCNA, CPA - 2013 - 2015 Mr. Anthony Chukwuemeka Nzom, MBA, FCNA, CPA - 2015 - 2017 Administration Dr. Sunday A. Ekune, B.Sc (Hons), M.Sc, FCNA, CPA - Registrar / Chief Executive Fatima Abdussalam, B.Sc. (Hons), CNA, CPA - Chief Accountant Mr. Gbeminiyi D. Ojelade B.Sc.(Hons), ACIA - Principal Manager (Registry) Rahman A. Bello B.A.( Hons), MBA, CNA - Principal Manager (Corporate Affairs) John O. T. Amah, Esq. LLB (Hons), LL.M, B.L., ACIArbN - Principal Legal Officer Mr. Femi Jogunade B.A. (Hons), ACIPM, MPIA - Senior Manager, Exams & Records Mrs Aduke Akande, ACTI, CNA - Head, Internal Audit Mr. Tajudeen Salaudeen, B.Sc., MCITP, MCPD - Head, ICT Nigerian College of Accountancy Joseph Femi Adebisi, Ph.D, ANIM, FCNA - Director-General Kayode Olushola Fasua, Ph.D, FCTI, FCNA - Director of Studies Editorial Board Chairman/Editor-in-Chief: Shehu Usman Hassan, B.Sc, M.Sc, Ph.D, FCFA, FCILRM, NAA, AAFA, CNA Deputy Editor-in-Chief: Prof. Joseph Offiong Udoayang, B.Sc, M.Sc, MBA, Ph.D, ACTI, FCNA Members: Akor Ikpam, B.Sc. (Hons), MBA, Ph.D, Kss, FCNA Luka Mailafia, B.Sc, MBA, M.Sc, Ph.D, NAA, FDA, CNA Shuaibu Umar Usmanu, B.Sc, MBA, CNA Eseyin Joseph Ayo, HND, B.Sc, PGD, ANIM, CNA Ismaila Olotu Abdullahi, B.Sc, M.Sc, Ph.D, MNAA, AAFA CNA Secretary: Mr. Sani Abdulmalik, BLS (Hons) CLN Editor: Mr. Obafemi Olusanya, PGD (Journalism) DISCLAIMER: The views expressed in this journal are not necessarily those of the Association. Authors should note that they are fully responsible for their papers and claims thereof. The Editorial Board and/or the Associatinn cannot be held liable for any acts of plagiarism or misleading/misrepresentation of facts. All correspondence should be addressed to the Editor-in-Chief, The Certified National Accountant, 250, Herbert Macaulay Street, P.M.B. 1011, Yaba, Lagos. Tel: +2347038433781 E-mail: [email protected] Web Address: www.anan.org.ng Chairman / Editor-in-Chief, Editorial Board Email: [email protected], [email protected] Cell: +2348067766435, +2348057777085, +2348090222215, +2348030645100 JULY - SEPTEMBER, 2017 1 Volume 25 Number 3, July - September, 2017 Editorial: 3 Editor-in-Chief Articles Ownership Formation and Firm 5 Performance of Listed Deposit Money Banks in Nigeria: Abbas Usman Implication of Accounting Information 13 on Bank Lending Decision in Nigeria: UDU, Ama Aka, ELECHI, Ogbonnaya O. & UDU, Uduma Samuel A. Determinants of Segment Financial 22 Reporting of Listed Conglomerate Firms in Nigeria: Mazadu Abdullahi Saifullahi Determinants of Profitability of Listed 32 Industrial Goods Firms in Nigeria: Yusuf Ibrahim and U-ungwa Masekaven Martin Shareholding and Performance of 45 Listed Chemical and Paint Firms in Nigeria: Daddau Haruna 2 JULY - SEPTEMBER, 2017 CNAJ VOLUME 25 NUMBER 3 EDITORIAL I am elated to welcome readers of this issue of the Shehu Usman Hassan PhD, FCFA, FCILRM, NAA, Certified National Accountant Journal (CNAJ), AAFA, CNA Vol.25 Issue 3, July - September, 2017 published by the Association of National Accountants of Nigeria Department of Accounting (ANAN). The CNAJ has over the years established Kaduna State University, Kaduna momentous presence in the Accounting profession Kaduna State. and adored enviable status as an orifice for high quality research. The new look and reputation of the journal is particularly due to the time and commitment of the current Editorial Board. I would like to thank my editorial board members, authors and all those who have played a role in making this revised issue a reality. I am especially grateful to the President, Alhaji Shehu Usman Ladan of our great and fast budding association for ensuring this issue of the CNAJ see the light of the day. In this issue, five articles have been published on very timely topics, all of which should be of interest to CNAJ readers. Specifically, the issue contains the following: Ownership Formation and Profitability of Banks in Nigeria, Implication of Accounting Information and Lending Decision in Nigerian Banks, Determinants of Segment Financial Reporting of Conglomerates Firms, Determinants of Profitability of Industrial Goods Firms, Shareholding and Performance of Listed Chemical and Paint Firms in Nigeria. In addition to welcoming papers concerning any aspect of Accounting and Accounting Practice, I would be more than glad to consider suggestions from readers of CNAJ; the concern of the journal is expansive and ideas are always welcome. JULY - SEPTEMBER, 2017 3 CNAJ VOLUME 25 NUMBER 3 Ownership Formation and Firm Performance of Listed Deposit Money Banks in Nigeria ABBAS Usman* ABSTRACT The study examines the influence of ownership formation on the profitability of listed deposit money banks in Nigeria for a period of ten (10) years (2007-2016). The study has fifteen (15) deposit money banks in Nigeria listed on the Nigeria Stock Exchange as at 2015 as its population where all the fifteen (15) listed deposit money banks in Nigeria were used as sample of the study by adopting census sampling technique. The study used secondary source of data where the data was extracted from annual report and accounts of the listed deposit money banks in Nigeria and the data was analyzed using panel multiple linear regression. The study found that, managerial shareholding, institutional shareholding, block shareholding and foreign shareholding have a strong positive significant impact on the profitability of listed deposit money banks in Nigeria. The study therefore recommends that, the banks should be encouraged by regulatory bodies concerned to use the shareholding formation discovered in this study due to the role that the variables play in enhancing the profitability of the listed deposit money banks in Nigeria. Keywords: Ownership formation, Shareholding, Profitability, Deposit Money Banks (DMBs) and Nigeria 1. Introduction monitoring by the board should decrease. Amran and Ahmad (2013) predict that there are differences in Ownership formation is one of the most significant factors company performance because for managers that work for in shaping the corporate governance system of any companies, they will strive hard and make sure those company and that when ownership is dispersed, companies are making profit. Thus, these managers will expect to receive bonuses and shares from the companies shareholding control tends to be weak because of poor as a return for the hard work done. However, for the family shareholder monitoring (Mokaya & Jagongo, directors, they have two choices - to strive hard, to ensure 2015).Owners of shares of public companies are so many that family companies are making great profit, and later, that they are not able to efficiently managed the decisions they are the ones that receive the returns in terms of of the management team, and thus cannot be assured that bonuses or shares, or just feel comfortable with the current the management team represents their interests.Owners situation within which they are operating and only with a majority of the voting shares in a firm, through their endeavour to sustain their businesses. right to elect and control majority of the directors and to determine the outcome of shareholders' votes on other Institutional shareholders are organizations that have large matters have tremendous power to benefit themselves at amounts of funds to invest and they do invest a healthy the expense of the minority shareholders. Thus, the type of amount of these funds into company shares such aspension owners as well as the distribution of ownership stakes will funds, insurance companies and collective investment undoubtedly have an impact on the performance of firms institutions such as unit trust funds and investment (Srivastava, 2011). companies (Shah, Butt & Saeed, 2011). A general opinion exists that, Block-shareholding in a firm may actually Shehu (2013) argued that managerial ownership represents enhance its performance as having a large controlling the interest of managers in the equity shareholding of a shareholder with majority voting would ultimately firm. The reason behind the rise of this corporate decrease the firm's monitoring costs. There is also an governance variable is rooted in the agency theory which assumption that managers are imperfect agents of assumes that managers' equity holdings encourage them to shareholders, as they could attempt to pursue their own act in a way that maximizes the value of the firm. The interest of both shareholders and management starts to converge as the management holds a portion of the firms' *Abbas Usman is a lecturer in the Department of Accounting, Faculty equity ownership, this implies that the need for intense of Social and Management Sciences, Kaduna State University (KASU), Kaduna-Nigeria. 4 JULY - SEPTEMBER, 2017 CNAJ VOLUME 25 NUMBER 3 goals rather than work on optimizing the shareholders' focused on only ownership concentration and abandoned wealth.