Overhead Costs and Financial Performance of SelectedDeposit Money Banks in Nigeria IntroductionCost effectiveness can lead to rapid improvement of firm's financial performance (Kinyugo, 2014;Liu, Wu, Zyong and Liu, 2020). There exists a direct relationship between effective management of direct and indirect costs and profitability of listed non-financial firms in Nigeria (Oluwagbemiga, Olugbenga and Adeoluwa, 2014;Okezie, Okezie and Ogbu, 2017). However, overhead expenses are either affected by fluctuations in the volume of productions or sales activities (direct/variable overhead) or otherwise (fixed overhead). They are generally of fixed nature. Ogbadu ( 2009) observed that the increasing trend of overhead costs has been the leading challenge of consumer and industrial goods firms which gulp business profits. This observation also applies to the banking sector and has led to the continuous closure of banking firms and other manufacturing companies in Nigeria. Anup and Nagarajan (1990) opined that profitability is the profit earning capacity of the firm, which is considered to be the key factor in influencing the reputation of the firm. The borrowing capacity of firms has been linked to depend on the level of profit achieved as at the end of the financial year. Profitability inspires public investments, increases market value of firms, provides return (dividend) to shareholders and makes a provision for the future expansion of the firm that would generate a better profit (Sitienei and Memba, 2015).The incessant shutdowns, unemployment, redundancy and low capacity utilization by banking firms resulting in high cost of inputs hinders the financial performance of the industry. The justification or otherwise of overhead costs in driving the financial performance and indeed other corporate value indices of banking firms in Nigeria has constituted a challenging academic puzzle and dilemma in the past few decades. Numerous empirical studies on the association between overhead costs and the profitability and other performance indicators of banking firms in Nigeria arrived at differing and conflicting results. While some showcased that overhead costs exerted no significant effect on profitability of banking firms, others indicated overhead costs as having significant effect on profitability, although carried out using specific variables and tools. This study, therefore, becomes imperative as their relationship has an obvious research gap giving the divergence in results. Further, banking firms in Nigeria are diversifying to subsectors with even higher overhead