THE EFFECT OF ACCOUNTING INFORMATION ON FIRM PERFORMANCE IN NIGERIAN BANKING SECTOR

ABSTRACT The performance of banks is critical for the stability and growth of the financial sector and the broader economy. In Nigeria, challenges such as inefficiencies in resource allocation, fluctuating profitability, and credit risks have highlighted the importance of accurate and timely accounting information in guiding management decisions and enhancing firm performance. This study investigates the effect of accounting information on the performance of deposit money banks in Nigeria, focusing on Earnings Per Share (EPS), Loan-to-Deposit Ratio (LDR), and Non-Performing Loan Ratio (NPLR) as key indicators of accounting information, while Net Interest Margin (NIM) serves as a proxy for firm performance. Using secondary data spanning 2010 to 2024, sourced from the Central Bank of Nigeria (CBN) and National Bureau of Statistics (NBS), the study employs descriptive statistics, correlation, and multiple regression analyses to examine the relationships among these variables. The findings reveal that EPS and LDR have a positive and statistically significant effect on NIM, indicating that higher profitability per share and efficient deposit utilization enhance bank performance. Conversely, NPLR exhibits a negative but statistically insignificant impact, suggesting that risk management practices mitigate its adverse effects. Overall, the study confirms that accounting information is a critical determinant of bank performance, with financial and managerial metrics providing essential guidance for decision-making, policy formulation, and sustainable growth in the Nigerian banking sector. The study offers practical insights for managers, investors, and policymakers seeking to strengthen operational efficiency and financial stability.