IDEAS home Printed from https://ideas.repec.org/a/bcp/journl/v8y2024i5p1830-1845.html
   My bibliography  Save this article

Liquidity Risk Management and Financial Performance of Listed Commercial Banks in Nigeria

Author

Listed:
  • POROYE Isioma Rosemary

    (Postgraduate Student, Department of Accounting, Faculty of Management Sciences, Delta State University Abraka)

  • OKOLIE, A.O.

    (Department of Accounting, Faculty of Management Sciences, Delta State University Abraka)

Abstract

The study investigates the relationship between liquidity risk management and financial performance of listed commercial banks in Nigeria. To achieve this, liquidity risk management proxies which have been widely used in the literature were employed namely deposit to total asset, total loan to deposit, liquidity asset to total asset and short-term liability to total asset ratios (independent variables) and a measure of financial performance return on asset (dependent variable). Ex-post facto research design was employed and panel data sourced from the yearly published annual reports and accounts of listed commercial banks in Nigeria. The fixed and random effects panel regression results reveal mixed evidence suggesting that the effect of liquidity risk management on financial performance of the listed commercial banks in Nigeria depends largely on measures of liquidity risk management used in this study. One key policy implication of this outcome is that maintaining a balanced lending and funding strategy is crucial for commercial banks. Hence, it recommends among others that managers of listed commercial banks in Nigeria should find an optimal balance that aligns with bank’s risk appetite and growth objectives and should also exercise caution in expanding lending.

Suggested Citation

  • POROYE Isioma Rosemary & OKOLIE, A.O., 2024. "Liquidity Risk Management and Financial Performance of Listed Commercial Banks in Nigeria," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(5), pages 1830-1845, May.
    • Handle: RePEc:bcp:journl:v:8:y:2024:i:5:p:1830-1845
    as

    Download full text from publisher

    File URL: https://www.rsisinternational.org/journals/ijriss/Digital-Library/volume-8-issue-5/1830-1845.pdf
    Download Restriction: no
    File URL: https://rsisinternational.org/journals/ijriss/articles/liquidity-risk-management-and-financial-performance-of-listed-commercial-banks-in-nigeria/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Alex Muriithi Njue & Samuel Nduati Kariuki & Duncan Mugambi Njeru, 2020. "Liquidity Management and Financial Performance of Microfinance Institutions in Kenya," The Journal of Social Sciences Research, Academic Research Publishing Group, vol. 6(11), pages 943-953, 11-2020.
    2. C.R. Sathyamoorthi & Mogotsinyana Mapharing & Mashoko Dzimiri, 2020. "Liquidity Management and Financial Performance: Evidence From Commercial Banks in Botswana," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 11(5), pages 399-413, October.
    3. Alim, Wajid & Ali, Amjad & Metla, Mahwish Rauf, 2021. "The Effect of Liquidity Risk Management on Financial Performance of Commercial Banks in Pakistan," MPRA Paper 112482, University Library of Munich, Germany.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ahsan Javaid & Nosheen Nawaz, 2021. "Impact Of Customer Relationship Management On Firm Performance: Empirical Investigation Of Insurance Providers In Pakistan," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 10(4), pages 64-75, December.
    2. Sohail Aslam & Maqsood Ahmad & Naveed Anwer & Farooq Ahmad, 2022. "Effect Of Corporate Social Responsibility On Firm Financial Performance Through Organization Identification: The Contextual Effect Of Authentic Leadership," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 11(1), pages 142-152, March.
    3. Warda Najeeb Jamal & Rana M. Zahid Hafeez & Owais Shafique & Razi Razzaq & Gulfam Asif & Muhammad Waqas Ashraf, 2021. "Impact Of Microcredit Finance On The Socioeconomic Status Of The Underprivileged Populace Of Punjab: Through The Mediating Effect Of Knowledge Sharing Ability And Financial And Legal Awareness," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 10(4), pages 113-125, December.
    4. Aasir Ali & Nain Tara & Nosheen Nawaz & Nadim Rafi, 2021. "Exploring The Role Of Mobile Marketing As A Blessing Or Curse: A Case Study Of Pakistan," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 10(4), pages 56-63, December.
    5. Kehinde Isiaq Olaiya & Kareem Abidemi Arikewuyo & Ashim Babatunde Shogunro & Lateef Adewale Yunusa, 2021. "Effect of Risk Mitigation on Profitability of Insurance Industries in Nigeria," Business & Management Compass, University of Economics Varna, issue 3, pages 330-343.
    6. Aliu Oguntade Fatai & Raymond Osi Alenoghena, 2024. "The Role of Deposit Growth in The Productivity of Deposit Money Banks in Nigeria: Case Study of Union and Wema Banks in Lagos State," International Journal of Research and Scientific Innovation, International Journal of Research and Scientific Innovation (IJRSI), vol. 10(12), pages 234-246, January.
    7. Ullah, Nazim & Mat Nor, Fauzias & Abu Seman, Junaidah & fadly, ahmed & ainna, nur, 2023. "Acquirer’s Operational Performance and Stability of Islamic Banks: Mediation Role of Market Structure," MPRA Paper 118683, University Library of Munich, Germany.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bcp:journl:v:8:y:2024:i:5:p:1830-1845. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dr. Pawan Verma (email available below). General contact details of provider: https://rsisinternational.org/journals/ijriss/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.