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Effect of Liquidity Management on Earnings per Share of Selected Deposit Money Banks in Nigeria (2004-2017)

Author

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  • Dr Olushola Babatunde OLUWALAIYE

    (Department of Economics, Babcock University, Ilishan-Remo, Ogun State, Nigeria)

  • Dr Abolade Francis AKINTOLA

    (Department of Finance, Babcock University, Ilishan-Remo, Ogun State, Nigeria)

  • Ibukun Gbemi BANWO

    (Department of Finance, Babcock University, Ilishan-Remo, Ogun State, Nigeria)

Abstract

The paper investigated effect of liquidity management on earnings per share (EPS) of selected deposit money banks (DMBs) in Nigeria from 2004 to 2017 with sample size of eleven (11) banks. Secondary data obtained from annual published financial statement of selected deposit money banks were used for the study. Ordinary Least Square (OLS) regression techniques were employed to analyze the data obtained. Results of the regression analysis shows that only current ratio has positive effects on earnings per share, while debt ratio and operating cashflow have negative effects. The study therefore concluded that liquidity management has significant effect on the earnings per share (EPS) of the selected deposit money banks in Nigeria. The study recommends that there should be implementation of policies to improve on the existing liquidity risk management policies of deposit money banks in Nigeria. Added to the recommendation above is that deposit money banks must engage in a creative search for liquidity investment opportunities not only for themselves, but also for their corporate customers.

Suggested Citation

  • Dr Olushola Babatunde OLUWALAIYE & Dr Abolade Francis AKINTOLA & Ibukun Gbemi BANWO, 2020. "Effect of Liquidity Management on Earnings per Share of Selected Deposit Money Banks in Nigeria (2004-2017)," International Journal of Research and Scientific Innovation, International Journal of Research and Scientific Innovation (IJRSI), vol. 7(5), pages 251-256, May.
    • Handle: RePEc:bjc:journl:v:7:y:2020:i:5:p:251-256
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    References listed on IDEAS

    as
    1. Ahmed Arif & Ahmed Nauman Anees, 2012. "Liquidity risk and performance of banking system," Journal of Financial Regulation and Compliance, Emerald Group Publishing Limited, vol. 20(2), pages 182-195, May.
    2. Md. Nur Alam Siddik & Sajal Kabiraj & Shanmugan Joghee, 2017. "Impacts of Capital Structure on Performance of Banks in a Developing Economy: Evidence from Bangladesh," IJFS, MDPI, vol. 5(2), pages 1-18, May.
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