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The effect of liquidity management on the financial performance of banks in Nigeria

 Department:Accountancy  
 By:usericon SIRJOSEPH  

 Project ID: 8547
 Rating:  (5.0) votes: 1
   Price:₦4000
Abstract
This study examines the effect of liquidity management on the financial performance of banks in Nigeria for the period 2019 to 2023. The study uses secondary data from five banks listed on the stock exchange in Nigeria. The proxies employ for liquidity management are Liquidity ratio (LQR), Loan to deposit ratio (LDR), Cash reserve ratio (CRR) and deposit ratio (DR), while return on assets (ROA), return on equity (ROE) and return on net interest margin (NIM) are proxies for financial performance (Profitability). The study uses panel regression analysis in estimating the model and the Hausman test while making a choice between the fixed effect and random effect models. The study finds that liquidity ratio (LQR) has a positive and significant effect on the financial performance of DMB as measured by return on assets (ROA), return on equity (ROE) and net interest margin(NIM). It therefore recommends that banks in Nigeria should establish sound governance and risk management systems by developing strategies, policies for liquidity management that is well integrated into its risk management practices as well as establish a contingency funding plan to address any liquidity shortfall during periods of stress or emergency while ensuring that active monitoring liquidity funding needs to avert any liquidity challenge that could trigger crisis in the banks is promptly addressed....
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