Liquidity and bank performance are key factors in determining the survival, growth, sustainability and performance of a banking system. Mistakes in liquidity planning and implementation can affect banking operations and might exhibit long term effect on the economy. The main aim of this study is to find empirical evidence of the impact of liquidity management on the performance of deposit money banks. 24 banks were surveyed which constitute the entire deposit money banking industry in Nigeria between 1986 and 2011. Secondary data were collected and analysed using SPSS. The study uses descriptive, correlations and inferential statistics. Bank performance in terms of profitability is measured by its return on equity. Three hypotheses are formulated and statistically tested at 5 per cent level of significance using Multiple Linear Regression Analysis. Findings from the empirical analysis show that there is a significant relationship between liquidity management and the performance of Deposit Money Banks in Nigeria. The correlation results reveal positive impacts between return on equity and liquidity management variables: liquidity and cash reserve ratios, whereas loan to deposit ratio shows negative impact. However, the key results indicate that only the banks with optimum liquidity were able to maximize returns. The study concludes that illiquidity and excess liquidity pose problem to bank management operations and recommends that bank should adopt optimum liquidity model for efficiency and effectiveness.
| Published in | International Journal of Economics, Finance and Management Sciences (Volume 5, Issue 3) |
| DOI | 10.11648/j.ijefm.20170503.13 |
| Page(s) | 146-161 |
| Creative Commons |
This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited. |
| Copyright |
Copyright © The Author(s), 2017. Published by Science Publishing Group |
Liquidity, Management, Performance, Deposit Money Banks
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APA Style
Daniel Bassey Edem. (2017). Liquidity Management and Performance of Deposit Money Banks in Nigeria (1986 – 2011): An Investigation. International Journal of Economics, Finance and Management Sciences, 5(3), 146-161. https://doi.org/10.11648/j.ijefm.20170503.13
ACS Style
Daniel Bassey Edem. Liquidity Management and Performance of Deposit Money Banks in Nigeria (1986 – 2011): An Investigation. Int. J. Econ. Finance Manag. Sci. 2017, 5(3), 146-161. doi: 10.11648/j.ijefm.20170503.13
AMA Style
Daniel Bassey Edem. Liquidity Management and Performance of Deposit Money Banks in Nigeria (1986 – 2011): An Investigation. Int J Econ Finance Manag Sci. 2017;5(3):146-161. doi: 10.11648/j.ijefm.20170503.13
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Download@article{10.11648/j.ijefm.20170503.13,
author = {Daniel Bassey Edem},
title = {Liquidity Management and Performance of Deposit Money Banks in Nigeria (1986 – 2011): An Investigation},
journal = {International Journal of Economics, Finance and Management Sciences},
volume = {5},
number = {3},
pages = {146-161},
doi = {10.11648/j.ijefm.20170503.13},
url = {https://doi.org/10.11648/j.ijefm.20170503.13},
eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20170503.13},
abstract = {Liquidity and bank performance are key factors in determining the survival, growth, sustainability and performance of a banking system. Mistakes in liquidity planning and implementation can affect banking operations and might exhibit long term effect on the economy. The main aim of this study is to find empirical evidence of the impact of liquidity management on the performance of deposit money banks. 24 banks were surveyed which constitute the entire deposit money banking industry in Nigeria between 1986 and 2011. Secondary data were collected and analysed using SPSS. The study uses descriptive, correlations and inferential statistics. Bank performance in terms of profitability is measured by its return on equity. Three hypotheses are formulated and statistically tested at 5 per cent level of significance using Multiple Linear Regression Analysis. Findings from the empirical analysis show that there is a significant relationship between liquidity management and the performance of Deposit Money Banks in Nigeria. The correlation results reveal positive impacts between return on equity and liquidity management variables: liquidity and cash reserve ratios, whereas loan to deposit ratio shows negative impact. However, the key results indicate that only the banks with optimum liquidity were able to maximize returns. The study concludes that illiquidity and excess liquidity pose problem to bank management operations and recommends that bank should adopt optimum liquidity model for efficiency and effectiveness.},
year = {2017}
}
TY - JOUR T1 - Liquidity Management and Performance of Deposit Money Banks in Nigeria (1986 – 2011): An Investigation AU - Daniel Bassey Edem Y1 - 2017/04/28 PY - 2017 N1 - https://doi.org/10.11648/j.ijefm.20170503.13 DO - 10.11648/j.ijefm.20170503.13 T2 - International Journal of Economics, Finance and Management Sciences JF - International Journal of Economics, Finance and Management Sciences JO - International Journal of Economics, Finance and Management Sciences SP - 146 EP - 161 PB - Science Publishing Group SN - 2326-9561 UR - https://doi.org/10.11648/j.ijefm.20170503.13 AB - Liquidity and bank performance are key factors in determining the survival, growth, sustainability and performance of a banking system. Mistakes in liquidity planning and implementation can affect banking operations and might exhibit long term effect on the economy. The main aim of this study is to find empirical evidence of the impact of liquidity management on the performance of deposit money banks. 24 banks were surveyed which constitute the entire deposit money banking industry in Nigeria between 1986 and 2011. Secondary data were collected and analysed using SPSS. The study uses descriptive, correlations and inferential statistics. Bank performance in terms of profitability is measured by its return on equity. Three hypotheses are formulated and statistically tested at 5 per cent level of significance using Multiple Linear Regression Analysis. Findings from the empirical analysis show that there is a significant relationship between liquidity management and the performance of Deposit Money Banks in Nigeria. The correlation results reveal positive impacts between return on equity and liquidity management variables: liquidity and cash reserve ratios, whereas loan to deposit ratio shows negative impact. However, the key results indicate that only the banks with optimum liquidity were able to maximize returns. The study concludes that illiquidity and excess liquidity pose problem to bank management operations and recommends that bank should adopt optimum liquidity model for efficiency and effectiveness. VL - 5 IS - 3 ER -
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