EFFECT OF LIQUIDITY ON PERFORMANCE OF NIGERIAN BANKING SECTOR; CHM 2

Department → Accountancy

Amount → ₦10,000.00

ABSTRACT This study examined effect of liquidity on performance of Nigerian banking sector, while the specific objectives are to ascertain the effect of cash reserve ratio on return on equity (ROE) of Nigerian banking sector. Appraise the effect of Cash at Vault on return on equity (ROE) of Nigerian banking sector. Determine the effect of quality of risk asset on return on equity (ROE) of Nigerian banking sector. The Ex post facto design was adopted in this study. The data were extracted from annual fiancial reports and accounts of the five (5) sampled banks from 2008 to 2017 through a purposive sampling technique. The data collected were analysed using E-view 9.0. the result of the analysis shows that Cash reserve ratios has positive and significant effect on return on equity (ROE) of Nigerian banking sector. It was also observed that Cash at vault has negative and insignificant effect on return on equity (ROE) of Nigerian banking sector. The study equally shows that Quality of risk assets (QRA) has a positive and significant effect on return on equity (ROE) of Nigerian banking sector. The implication of this findings is that since the survival of deposit money banks depend on liquidity management and profitability, they should not solely concentrate on the profit maximization concept but also adopt measures that will ensure effective liquidity management. The measures will help to minimize or avoid cases of excessive and deficient liquidity as their effects are negative.
 




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