Acta Universitatis Danubius. Œconomica, Vol 16, No 2 (2020)

Abstract

The study investigates the impact of human capital on the performance of the deposit money banks in Nigeria from 2007 to 2019. The study used expenditures on human resources to proxy human capital while profit after tax is used to proxy performance and covered ten banks which include the five first tier lenders that hold almost 80% of the entire banking sector asset in Nigeria. Panel data is applied and the result shows that human capital failed to have the expected positive and significant impact on performance of the banks rather the relationship is negative and insignificant. However, total asset of the banks remains the most important determinants of performance of the banks. The study recommends that banks should be encouraged to employ moderate and skilled human capital that will have positive impact on their performance rather than accumulating staff which will not contribute positively to their performance and which they will later turn out unceremoniously thereby adding to the already worsened unemployment problem of the country.