THE IMPACT OF LIQUIDITY MANAGEMENT ON THR FINANCIAL PERFORMANCEOF DEPOSIT MONEY BANKS

ABSTACT This study examines the effects of liquidity management on the performance of quoted Deposit Money Banks (DMBs) in Nigeria. The population of the sample is eighteen bank quoted on the floor of the Nigerian stock exchange. The study adopts ex-post facto research design using panel regression model (fixed effect) on cross sectional panel data for the period of thirteen years spanning through 2019-2023. It was found that, liquidity management proxied by savings mobilization has positive significant effect on the financial performance (ROA). Also operating efficiency has positive significant effect on financial performance and current ratio has positive significant effect on financial of deposit money banks in Nigeria. Therefore, the study concludes that, effective liquidity management encourages customers to deposit with the banks as their confidence is built on the banks. Also, the study concludes that, banks managements are more eager to extend credit to customers when they have enough cash and cash equivalent. This inspires the recommendations for diverse means of raising liquid assets to be able to engender customers’ confidence that leads to increase in deposit, and eventually increases loans expansion to customers among others.