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An Evaluation of Liquidity Management and Banks Performance in Nigeria: A Correlation Matrix Approach

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  • Peter Ego Ayunku

    (Niger Delta University, Department of Finance and Accountancy, Faculty of Management Sciences, Wilberforce Island, Yenagoa, Bayelsa State, Nigeria)

Abstract

This study evaluates the relationship between liquidity management and banks performance for the period 2005 – 2014, using some econometric tools to analyze the variables of interest. The study performs the Augmented Dickey Fuller (ADF) unit root test and found out that all the variables were stationary at first and second differencing. The estimation regression result indicates that Total Deposit of Banks (TOD) and Loans-Total Deposit Ratio (LDR) were statistically significant while Return on Assets (ROA) have a positive  but statistically insignificant relationship with Liquidity Ratio (LR). The study therefore recommended amongst others that monetary authorities should adopt appropriate liquidity ratio so as enhance the liquidity profile of banks.

Suggested Citation

  • Peter Ego Ayunku, 2017. "An Evaluation of Liquidity Management and Banks Performance in Nigeria: A Correlation Matrix Approach," Noble International Journal of Business and Management Research, Noble Academic Publsiher, vol. 1(8), pages 123-128, August.
    • Handle: RePEc:nap:nijbmr:2017:p:123-128
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    References listed on IDEAS

    as
    1. Sebastian Ofumbia Uremadu, 2012. "Bank Capital Structure, Liquidity and Profitability Evidence from the Nigerian Banking System," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 2(1), pages 98-113, January.
    2. Asikhia Olalekan & Sokefun Adeyinka, 2013. "Capital Adequacy And Banks’ Profitability Of Deposit Taking: An Empirical From Nigeria," Far East Journal of Psychology and Business, Far East Research Centre, vol. 13(4), pages 32-41, October.
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    Cited by:

    1. 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.
    2. John Ayodele Ajayi & Qudus Adekunle Lawal, 2021. "Effect of Liquidity Management on Banks Profitability," Business & Management Compass, University of Economics Varna, issue 2, pages 220-237.

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