IIARD International Institute of Academic Research and Development

INTERNATIONAL JOURNAL OF SOCIAL SCIENCES AND MANAGEMENT RESEARCH (IJSSMR )

E-ISSN 2545-5303
P-ISSN 2695-2203
VOL. 10 NO. 9 2024
DOI: 10.56201/ijssmr.v10.no9.2024.pg288.297

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Liquidity Management and Commercial Banks’ Performance in Nigeria

Andabai, Priye Werigbelegha, Ph.D & Oyakegha, Ekiyeghazi Samuel

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Abstract

The research looks at the performance of Nigerian commercial banks over a 31-year period, from 1993 to 2023, in relation to liquidity management. The Central Bank of Nigeria statistics bulletin 2023 provided the secondary data used in the research. The paper utilise an ex post facto design. Return on assets (ROA) was the dependent variable in the research, while loans and advances (LAA), non-performing loans (NPL), and provision for undesirable debt (PBD) served as the explanatory factors. We tested the proposed hypotheses using the Ordinary Least Squares statistical estimation approach. Loans and advances have a substantial positive implication on Nigeria's commercial banks' return on assets. Non-performing loans in Nigeria have a significant favourable influence on commercial banks' ROA. The amount that commercial banks in Nigeria reserve for bad debt has a positive and substantial implication on their ROA. According to the coefficient of determination, changes in Nigeria's liquidity management variables account for approximately 58% of the fluctuations in the country's commercial performance. For Nigeria to experience economic progress, the report suggests managing non-performing loans well. Nigeria's central bank needs to regularly evaluate the lending practices of the country's commercial banks. In order to improve the efficacy of regulatory and supervisory responsibilities, it is also recommended that the supervisory authorities actively participate in capacity development.

keywords:

Liquidity Management, Commercial Banks’ Performance, Nigeria.

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