Impact of Working Capital Management in Nigeria Banking Industry

This paper examines the Impact of Working Capital Management in Nigeria Banking Industry. Working Capital Management refers to the management of current asset and current liabilities. The major objectives of this study are; to examine the impact of excessive investment in current asset on bank’s profitability; to ascertain if bad management of working capital exposes banks to insolvency and to examine the impact of composition of working capital items of Nigeria banks on their profitability. Access Bank Plc. and UBA Plc. were chosen as the case study which was adopted as the population. In order to determine the sample size, the Yaro Yamen formula was used of which 55 was gotten as the sample size. Fifty – five questionnaires were administered out of which forty – eight was retrieved and properly filled. The percentage method was used to present and analyze the data. Based on the findings made, the study deduced the following: that excessive investment in current asset affect banks profitability and bad management of working capital expose banks to insolvency. The study recommends that banks should periodically evaluate receivables and liquidity management to determine their effectiveness and efficiency, and where necessary changes put in place, banks should concentrate on working capital decisions to optimize investments in them and ensure proper planning/ forecasting and control and appraise investments in working capital using capital investments models, determining ahead the viability of such investment.