LIQUIDITY MANAGEMENT ON FINANCIAL PERFORMANCE OF DEPOSIT MONEY BANKS IN NIGERIA

Abduly Akeen Ganiyu, Ehiagwina Doris Usiomoifoh, Akinloye Olusegun Adesola, Audu Nicholas Bola

Abstract


Despite having investments in safe, high-yielding, illiquid assets, many banks are bankrupt. Because of sudden withdrawals and a lack of liquid capital, some banks incur a large loss when they take out emergency loans, even when they have a lot of assets. This study therefore examined the impact of liquidity management on financial performance of deposit money banks in Nigeria. The study adopted an ex-post facto research design. The population of the study consists of all deposit money banks in Nigeria quoted firm on the floor of the Nigeria Stock Exchange (NSE). The data obtained were analyzed using correlation and regression analysis. Results of the analysis revealed that cash reserve ratio and loan deposit ratio have positive and significant impact on deposit money banks. The study concluded that liquidity management has significant impact on financial performance of deposit money banks in Nigeria. Recommendations were proffered in line with the findings of the study.


Keywords


Liquidity management, cash reserve ratio, loan deposit ratio, financial performance.

Full Text:

PDF

References


Adegbie, F. F., & Dada, O. T. (2018). Risk assets management, liquidity management and sustainable performance in Nigeria deposit money banks. International Journal of Accounting Research, 6(2), 1-10.

Akinwumi, I. A., Essien, J. M., & Adegboyega, R. (2017). Liquidity management and banks performance in Nigeria. Business Management and Economics, 5(6), 88-98.

Al-Ardah, M., & Al-Okdeh, S. (2022). The effect of liquidity risk on the performance of banks: Evidence from Jordan. Accounting, 8(2), 217-226.

Ariefianto, M. D., Trinugroho, I., Lau, E., & Sergi, B. S. (2022). Banks’ liquidity management dynamics: evidence from Indonesia. International Journal of Emerging Markets, 17(9), 2321-2349.

Bagh, T., Khan, M. A., Azad, T., Saddique, S., & Khan, M. A. (2017). The corporate social responsibility and firms’ financial performance: evidence from financial sector of Pakistan. International Journal of Economics and Financial Issues, 7(2), 301-308.

Bhattacharyya, I., & Sahoo, S. (2011). Comparative statics of central bank liquidity management: Some insights. Economics Research International, 2011(1), 930672.

Basyith, A., Djazuli, A., & Fauzi, F. (2021). Does working capital management affect profitability? empirical evidence from indonesia listed firms. Asian Economic and Financial Review, 11(3), 236.

Duruechi, A. H., Ojiegbe, J. N., & Otiwu, K. C. (2016). Liquidity management measures and bank performance in Nigeria. An empirical analysis. European Journal of Business and Management, 8(17), 24-35.

Fagboyo, O., Adeniran, A., & Adedeji, A. (2018, May). Impact of liquidity management on profitability in Nigeria’s banking sector. In Proceedings of ICGET Conference.

Jena, N., & Shekhar, S. (2020). A Study on impact of smart-phone usage on academic performance of Upper Primary students in Delhi. Psychology and Education, 57(9), 2863-2867.

Klaas, J., & Vagizova, V. (2014). Tools for assessing and forecasting financial stability of the commercial bank under conditions of instability. Investment Management and Financial Innovations, (11, Iss. 4 (spec. iss.)), 157-163.

Matolcsy, Z., & Wright, A. (2011). CEO compensation structure and firm performance. Accounting & Finance, 51(3), 745-763.

Mohanty, B., & Mehrotra, S. (2018). Relationship between liquidity and profitability: An exploratory study of SMEs in India. Emerging Economy Studies, 4(2), 169-181.

Kolapo, F. T., Mokuolu, J. O., Dada, S. O., & Adejayan, A. O. (2021). Strategic marketing innovation and bank performance in Nigeria. Innovative Marketing, 17(1), 120.

Okaro, C. S. O., & Nwakoby, C. (2016). Effect of liquidity management on performance of deposit money banks in Nigeria (2000-2015). Journal of Policy and Development Studies (JPDS), 10(3), 19-26

Okoli, C. F., Ifurueze, M. S., & Nweze, A. U. (2020). Liquidity and performance of deposits money banks in Nigeria. International Journal of Research and Innovation in Social Science, 4(10), 212-222.

Sanyaolu, W. A., Akintaro, A. O., Adebayo, A. T., & Adefolu, I. T. (2019). Income mix and liquidity of Nigerian deposit money banks: evidence from dynamic panel models. Journal of Accounting, Finance and Auditing Studies, 5(2), 88-105.

Shah, S. Z. A., Butt, S. A., & Saeed, M. M. (2011). Ownership structure and performance of firms: Empirical evidence from an emerging market. African Journal of Business Management, 5(2), 515-523.

Smith, A. (1776). An inquiry into the nature and causes of the wealth of nations: Volume One. London: printed for W. Strahan; and T. Cadell, 1776.

Wisdom, O., Obiajulu, O., Sandra, E., Eze, E., & Oluwatobi, R. (2021). Liquidity management: implications for financial performance of deposit money banks (DMBs) in Nigeria. Journal of Asian Business Strategy, 11(1), 24-32.

Zidan, K. (2020). Impact of liquidity management on the profitability of banks operate in Palestine. International Journal of Business and Social Science, 11(1), 11-33.


Refbacks

  • There are currently no refbacks.


 

ISSN PRINT: 2705-2494

ISSN ONLINE: 2705-2486

 

 

   

 

Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.