THE EFFECT OF FINANCIAL STATEMENTS ANALYSIS AS A MEASURE OF PERFORMANCE AND EFFICIENCY IN BANKING SECTOR IN NIGERIA (A CASE STUDY OF FIRST BANK OF NIGERIA PLC. GUSAU BRANCH)

This study examines the effect of financial statements analysis as a measure of performance and efficiency in the banking sector in Nigeria, using First Bank of Nigeria Plc, Gusau Branch as a case study. Financial statement analysis plays a critical role in evaluating the financial health, stability, and operational effectiveness of banks, especially in a highly regulated and competitive financial environment such as Nigeria. The study focuses on the application of analytical tools such as ratio analysis, trend analysis, and common-size statements in assessing key performance indicators, including profitability, liquidity, solvency, and efficiency. The research adopts a descriptive research design, relying on both primary and secondary data. Primary data were obtained through structured questionnaires administered to staff of First Bank, Gusau Branch, while secondary data were sourced from published annual financial reports and relevant academic literature. Data collected were analyzed using statistical and quantitative techniques to determine how effectively financial statement analysis influences decision-making, performance assessment, and overall efficiency within the banking system. Findings from the study reveal that financial statement analysis significantly enhances the bank’s ability to evaluate its operational strengths and weaknesses, improve strategic planning, ensure compliance, and sustain profitability. The results further show that financial ratios and other analytical tools provide reliable insights into liquidity levels, credit risk management, asset utilization, and overall financial stability. The study concludes that financial statement analysis is an indispensable tool for improving efficiency and performance in the Nigerian banking sector. The research recommends that banks should strengthen their financial reporting systems, adopt modern analytical tools, ensure transparency in disclosures, and provide regular training for financial analysts. It also suggests that regulatory bodies should enforce strict compliance with accounting standards to promote accuracy and consistency in financial reporting.