IMPACT OF LIQUIDITY MANAGEMENT ON FINANCIAL PERFORMANCE OF DEPOSIT MONEY BANKS IN NIGERIA
Abstract
liquidity management on the financial performance of deposit money banks in Nigeria, focusing on key liquidity indicators: loan to deposit ratio (LDR), loan to asset ratio (LAR), deposit to asset ratio (DAR), and cash reserve ratio (CRR), with financial performance measured by return on assets (ROA). Utilizing a quantitative research design, data were collected from the financial statements of selected deposit money banks over a ten-year period from 2014 to 2023. Descriptive statistics, correlation analysis, and regression techniques were employed to analyses the data and test the hypotheses. The findings reveal a significant relationship between liquidity management variables and financial performance, indicating that effective liquidity management is crucial for enhancing the profitability and stability of banks. Notably, LDR and DAR showed a positive correlation with ROA, while CRR demonstrated a moderate relationship. The study highlights critical implications for banking practitioners, policymakers, and regulators in Nigeria, emphasizing the need for robust liquidity management strategies to bolster financial performance. Furthermore, the research identifies gaps in the existing literature and suggests avenues for future studies, including the exploration of macroeconomic influences and the role of technology in liquidity management. Overall, this study contributes valuable insights into the dynamics of liquidity management within the Nigerian banking sector, underscoring its vital role in achieving financial sustainability.
Full-Text Access Notice
In accordance with the NERD Policy on promoting peer-reviewed publication, public access to the full text of a project, thesis or dissertation is restricted for three years, allowing the author and supervisors sufficient time to pursue peer-reviewed publication.
During this period, researchers with legitimate academic or research purposes may request authorisation directly from the author to enable NERD to release the indexed full texts of the work using the form below.