LIQUIDITY RISK AND FINANCIAL PERFORMANCE OF LISTED DEPOSIT MONEY BANKS IN NIGERIA
This study examines the effect of liquidity risk on financial performance of listed deposit money banks in Nigeria. The correlation research design was adopted based on positivist approach. Secondary data were extracted from twelve listed deposit money banks in the Nigerian Exchange Group (NEGX) fr...
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| Format: | Article |
| Language: | English |
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Department of Accounting and Finance, Federal University Gusau
2024-09-01
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| Series: | Gusau Journal of Accounting and Finance |
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| Online Access: | https://journals.gujaf.com.ng/index.php/gujaf/article/view/361 |
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| _version_ | 1849426953237430272 |
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| author | Bashir Abdulrauf Mohammed Aliyu Ahmed Abdullah Ibrahim Yusuf Suleiman Salami Prof. Salisu Mamman |
| author_facet | Bashir Abdulrauf Mohammed Aliyu Ahmed Abdullah Ibrahim Yusuf Suleiman Salami Prof. Salisu Mamman |
| author_sort | Bashir Abdulrauf Mohammed |
| collection | DOAJ |
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This study examines the effect of liquidity risk on financial performance of listed deposit money banks in Nigeria. The correlation research design was adopted based on positivist approach. Secondary data were extracted from twelve listed deposit money banks in the Nigerian Exchange Group (NEGX) from (2013 -2022) and analyzed using multiple regression technique. The study was under pin by risk management theory. The result of the Generalized Least Square Regression model showed that current risk has positive association with financial performance at 5% level of significant while cash reserve risk has a negative significant effect on financial performance of listed deposit money banks in Nigeria significant at 1%. In line with the findings, the study recommends among others; the management of the banks should recheck the need for recapitalization as doing this will enhance the capability of the banks in financing large transactions and resolving mismatching challenges as owners fund will be available for long term financing. The study also recommended that, the management of the banks should ensure compliance by keeping required amount in liquid as directed by central bank of Nigeria, as doing this will enable the banks to meet possible unexpected cash withdrawal, immature term deposit liquidation and other payable on demand which will enhance their performance. The banks’ management should always ensure compliance on regulatory directives particularly on cash reserve as doing this will reduce the possible loss and improve on their performance.
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| format | Article |
| id | doaj-art-59067150d93a4ad791adfa663d3979a6 |
| institution | Kabale University |
| issn | 2756-665X 2756-6897 |
| language | English |
| publishDate | 2024-09-01 |
| publisher | Department of Accounting and Finance, Federal University Gusau |
| record_format | Article |
| series | Gusau Journal of Accounting and Finance |
| spelling | doaj-art-59067150d93a4ad791adfa663d3979a62025-08-20T03:29:10ZengDepartment of Accounting and Finance, Federal University GusauGusau Journal of Accounting and Finance2756-665X2756-68972024-09-0151LIQUIDITY RISK AND FINANCIAL PERFORMANCE OF LISTED DEPOSIT MONEY BANKS IN NIGERIA Bashir Abdulrauf Mohammed0Aliyu Ahmed Abdullah 1Ibrahim Yusuf 2Suleiman Salami 3Prof. Salisu Mamman4Department of Accounting, ABU Business School, Ahmadu Bello University, Zaria Department of Accounting, ABU Business School, Ahmadu Bello University, ZariaDepartment of Accounting, ABU Business School, Ahmadu Bello University, ZariaDepartment of Accounting, ABU Business School, Ahmadu Bello University, ZariaDepartment of Accounting, ABU Business School, Ahmadu Bello University, Zaria This study examines the effect of liquidity risk on financial performance of listed deposit money banks in Nigeria. The correlation research design was adopted based on positivist approach. Secondary data were extracted from twelve listed deposit money banks in the Nigerian Exchange Group (NEGX) from (2013 -2022) and analyzed using multiple regression technique. The study was under pin by risk management theory. The result of the Generalized Least Square Regression model showed that current risk has positive association with financial performance at 5% level of significant while cash reserve risk has a negative significant effect on financial performance of listed deposit money banks in Nigeria significant at 1%. In line with the findings, the study recommends among others; the management of the banks should recheck the need for recapitalization as doing this will enhance the capability of the banks in financing large transactions and resolving mismatching challenges as owners fund will be available for long term financing. The study also recommended that, the management of the banks should ensure compliance by keeping required amount in liquid as directed by central bank of Nigeria, as doing this will enable the banks to meet possible unexpected cash withdrawal, immature term deposit liquidation and other payable on demand which will enhance their performance. The banks’ management should always ensure compliance on regulatory directives particularly on cash reserve as doing this will reduce the possible loss and improve on their performance. https://journals.gujaf.com.ng/index.php/gujaf/article/view/361Cash reserve riskcurrent riskfinancing gap riskfinancial performancefirm size |
| spellingShingle | Bashir Abdulrauf Mohammed Aliyu Ahmed Abdullah Ibrahim Yusuf Suleiman Salami Prof. Salisu Mamman LIQUIDITY RISK AND FINANCIAL PERFORMANCE OF LISTED DEPOSIT MONEY BANKS IN NIGERIA Gusau Journal of Accounting and Finance Cash reserve risk current risk financing gap risk financial performance firm size |
| title | LIQUIDITY RISK AND FINANCIAL PERFORMANCE OF LISTED DEPOSIT MONEY BANKS IN NIGERIA |
| title_full | LIQUIDITY RISK AND FINANCIAL PERFORMANCE OF LISTED DEPOSIT MONEY BANKS IN NIGERIA |
| title_fullStr | LIQUIDITY RISK AND FINANCIAL PERFORMANCE OF LISTED DEPOSIT MONEY BANKS IN NIGERIA |
| title_full_unstemmed | LIQUIDITY RISK AND FINANCIAL PERFORMANCE OF LISTED DEPOSIT MONEY BANKS IN NIGERIA |
| title_short | LIQUIDITY RISK AND FINANCIAL PERFORMANCE OF LISTED DEPOSIT MONEY BANKS IN NIGERIA |
| title_sort | liquidity risk and financial performance of listed deposit money banks in nigeria |
| topic | Cash reserve risk current risk financing gap risk financial performance firm size |
| url | https://journals.gujaf.com.ng/index.php/gujaf/article/view/361 |
| work_keys_str_mv | AT bashirabdulraufmohammed liquidityriskandfinancialperformanceoflisteddepositmoneybanksinnigeria AT aliyuahmedabdullah liquidityriskandfinancialperformanceoflisteddepositmoneybanksinnigeria AT ibrahimyusuf liquidityriskandfinancialperformanceoflisteddepositmoneybanksinnigeria AT suleimansalami liquidityriskandfinancialperformanceoflisteddepositmoneybanksinnigeria AT profsalisumamman liquidityriskandfinancialperformanceoflisteddepositmoneybanksinnigeria |