The Impact Of Liquidity Management On The Profitability Of Commercial Banks In Nigeria

ABSTRACT

This study investigated the impact of liquidity management on banks’ profitability, covering a period of fifteen years, from 1990 – 2004. Three explanatory variables were selected as proxies for liquidity management (short term fund, loanable funds and cash) in order to assess their impact on banks’ profitability. The result of the linear multiple regression analysis confirms the existence of a significant relationship between liquidity management and banks’ profitability, but showed that none of the explanatory variables contributes significantly to banks’ profitability. Another finding is that loanable funds bear an inverse relationship with banks’ profitability – a result that should worry policy makers. On the basis of the findings of the study, we recommend, that the Central Bank of Nigeria (CBN) should step up its surveillance on banks to ensure that they adhere strictly to the provisions of the prudential guidelines, commercial banks in Nigeria need to encourage raising of more deposits. This, beside its statutory effect on banks profitability, is equally a pointer to depositors confidence in banks and also commercial banks need to take a closer look at their liquidity management, this will go a long way to improving the general bank performance.

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APA

APPAH, E (2021). The Impact Of Liquidity Management On The Profitability Of Commercial Banks In Nigeria. Afribary. Retrieved from https://afribary.com/works/the-impact-of-liquidity-management-on-the-profitability-of-commercial-banks-in-nigeria-1

MLA 8th

APPAH, EBIMOBOWEI "The Impact Of Liquidity Management On The Profitability Of Commercial Banks In Nigeria" Afribary. Afribary, 28 May. 2021, https://afribary.com/works/the-impact-of-liquidity-management-on-the-profitability-of-commercial-banks-in-nigeria-1. Accessed 20 May. 2024.

MLA7

APPAH, EBIMOBOWEI . "The Impact Of Liquidity Management On The Profitability Of Commercial Banks In Nigeria". Afribary, Afribary, 28 May. 2021. Web. 20 May. 2024. < https://afribary.com/works/the-impact-of-liquidity-management-on-the-profitability-of-commercial-banks-in-nigeria-1 >.

Chicago

APPAH, EBIMOBOWEI . "The Impact Of Liquidity Management On The Profitability Of Commercial Banks In Nigeria" Afribary (2021). Accessed May 20, 2024. https://afribary.com/works/the-impact-of-liquidity-management-on-the-profitability-of-commercial-banks-in-nigeria-1