This study wants to see how tangible assets affect the relationship between financial leverage and financial performance of banks. The main objective of this study is to examine the moderating role of firm’s tangible assets on the relationship between financial leverage and financial performance of Deposit Money Banks (DMBs) in Nigeria. The study employed quantitative research design using ex post facto research method. The study analysed data from eight major DMBs as identified by the Central Bank of Nigeria in 2022 and with national and international licenses. The sample size was determined using Krejcie and Morgan's (1970) sample size estimation table, and data from 2012 to 2023 were analysed using random-effects regression with STATA version 17. The findings indicate that the debt-to-equity ratio negatively impacts Return on Assets (ROA), emphasizing that a greater reliance on equity financing improves profitability. On the other hand, the debt-to-asset ratio positively influences ROA, highlighting that efficient debt utilization relative to assets boosts financial performance. Additionally, tangible assets were found to strengthen the relationship between debt-to-asset ratio and ROA, enhancing the positive effect of debt utilization on profitability. However, no such moderating effect was found between debt-to-equity ratio and ROA. The study recommends that banking executives focus on equity financing and invest in tangible assets to optimize financial performance. Investors are advised to prioritize banks with a well-managed debt-to-asset ratio and support prudent financial policies. Policymakers, financial analysts, and academics are encouraged to enhance regulatory frameworks, improve risk assessment models, and promote research on sustainable leverage management to ensure financial stability in the banking sector.