Determinants of Liquidity Management: Evidence from Nigerian Banking Sector

Kajola, Sunday Olugboyega; Sanyaolu, Wasiu Abiodun; Alao, Abdul-Azeez; Babatolu, Ayorinde

doi:10.15688/ek.jvolsu.2021.3.9

Cited by 11 publications

(16 citation statements)

References 33 publications

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“…Tables 8, 9 show that IR and GDPGR have a positive and significant impact on ROA, whereas GDPGR has a positive significant impact on ROE and IR has a negative significant impact on ROE. Aykut (2016), Tan and Anchor (2017), Tan and Floros (2018), Kajola et al (2019), andTrusova et al (2021) were among the researchers who confirmed the findings of the current investigation. We can rule out the null hypothesis (H2) based on the findings.…”

Section: Discussionsupporting

confidence: 86%

Profitability determining factors of banking sector: Panel data analysis of commercial banks in South Asian countries

et al. 2022

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Aim of the articleThe main purpose of this article was to investigate the impact of the determinants of profitability on the commercial banks in Asian countries. An Asian country like Bangladesh and India was selected as the research field. The present study also pursues to examine the impact of specific factors and macroeconomic factors on the profitability in the Bangladeshi and Indian private commercial banking sectors.Methods applied and analysis toolsThe data were retrieved from the Annual Reports of Indian and Bangladeshi private commercial banks covering the period of 2010–2021. As sample, 40 private commercial banks were considered randomly, of which 20 were from India and 20 were from Bangladesh. The panel data research methodology was used as an estimation technique to analyze the data. Also, the ordinary least squares (OLS) regression model was used to scrutinize data. To check whether the models were appropriate, the Breusch–Pagan Lagrange Multiplier (LM) Test was employed. Banks' specific factors and microeconomic factors showed almost the same variations for both Bangladesh's and India's private banks. All models and tests were evaluated using E-views econometric software.The major findingsThe present study finds that the Return on Asset (ROA) from the banks' specific variables, strength of the Bank size (BS), and Debt to Asset Ratio (DAR) are found to be positive and significant. For banks, the Deposit to Asset Ratio (DTAR) and the Loan to Deposit Ratio (LDR) are found to be negative and significant. The Equity to Asset Ratio (EAR) and Debt to Equity Ratio (DER) do not have any positive/negative impact.Contribution, originality, and implicationsAs macroeconomic variables, the inflation rate (IR) and the GDP growth rate (GDPGR) are measured and found to be positive and significant for ROA. As macroeconomic variables, the Inflation Rate (IR) and the GDP Growth Rate (GDPGR) are found to be positive and significant in the case of ROA. The concerned authorities responsible for regulating the financial performance of the banking sector can use the results of this study to take various fruitful decisions on bank profitability.

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Section: Discussionsupporting

confidence: 86%

Profitability determining factors of banking sector: Panel data analysis of commercial banks in South Asian countries

et al. 2022

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“…our finding contradicts with that of Asian (2015), who revealed that all indicators in the liquidity ratio have a substantial relationship with the profit growth of the pharmaceutical business in Nigeria, implying that continued improvement in the indicators can lead to increased earnings growth by pharmaceutical industry. Kajola et al (2019), found a favorable and statistically significant association between two liquidity risk management proxies (current ratio and liquidity ratio) and return on asset.…”

Section: Discussionmentioning

confidence: 90%

“…(1) Liquidity has a positive and significant effect on profitability but a negative and insignificant effect on firm value; (2) corporate size has a positive and not significant effect on financial performance and firm value; (3) profitability has a positive and significant impact on firm value; and (4) Liquidity has a significant and positive impact on firm value. Kajola et al (2019), analyzed the influence of banks' profitability in ten Nigerian deposit money organizations from 2008-to-2017. It was decided to use an ex post facto study design.…”

Section: Literature Reviewmentioning

confidence: 99%

“…This research was prepared to close those inadequacies. Numerous articles on this topic focused mostly on the financial industry, including banks, insurance businesses, oil and gas companies, and other finance institutions, etc ValuereschiwatI (2020); Appah et al (2021); Sutardjo and Afriyani (2019); Kajola et al (2019). But not much has been written that emphasis on the pharmaceutical sector of the economy.…”

Section: Introductionmentioning

confidence: 99%

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Influence of Liquidity and Profitability on Profits Growth of Nigerian Pharmaceutical Firms

Chika

Promise²,

U³

et al. 2022

GAAR

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Purpose: This study sought to assess the influence of liquidity ratio and profitability ratio on profit growth of pharmaceutical firms in Nigeria. Method: The researcher employed ex-post facto research strategy with a population of six (6) selected listed pharmaceutical firms in Nigerian stock exchange market. The study used 30 firm yearly observations from the six pharmaceutical firms listed in Nigeria. Results: The results of the study revealed that the current ratio's liquidity ratio and the quick ratio's liquidity ratio had a statistically significant link with profit growth rate. The profit growth rate has no statistically significant link with the profitability ratio of net profit margin and return on asset. Limitations: The discoveries of this study is limited to pharmaceutical firms in Nigeria and may not be adopted elsewhere. Contribution: This study is anticipated to help pharmaceutical companies manage their cash and cash equivalents while also improving the performance of the business. Keywords: 1. Liquidity ratio 2. Profitability ratio 3. net profit margin 4. return on asset 5. profit growth

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“…Also, while traditional monetary policy measures are not effective tools for achieving financial sector stability, the effect of capital adequacy regulation on financial distress resolution depends on how the former is measured. Kajola et al (2021) examined the determinants of liquidity management in twelve Nigerian banks during 2009-2018. Liquidity ratio (LQR) and deposit to asset ratio (DAR) were used as surrogates for liquidity management.…”

Section: Literature Reviewmentioning

confidence: 99%

Liquidity Management and Financial Performance: Evidence from Listed Deposit Money Banks in Nigeria

Usman

Ahmed

Bawuro

2022

Sri Lankan J. Banking & Finance

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The study explored the impact of liquidity management on financial performance of listed deposit money banks in Nigeria. The population of this study comprises all the listed Deposit Money Banks on the Nigeria Stock Exchange (NSE) as at 31 st December, 2020, which constitutes Sixteen (16) Banks. Fourteen (14) Banks were emerged as sample after two (2) were filtered out based on some criteria. Data were collected from the annual reports and accounts of the sample Banks for the period of the study. Collected data were analysed using descriptive statistics, correlation and multiple regression technique. The findings of the study revealed that Liquidity ratio (LR) has positive and significant impact on the financial performance of listed Deposit Money Banks in Nigeria. The finding further shows that cash reserve ratio (CRR) is negative and significantly related to the financial performance of listed Deposit Money Banks in Nigeria. Finally, the finding shows that Loan to debt ratio (LDR) has a positive but insignificant relationship with financial performance of listed Deposit Money Banks in Nigeria. The study therefore, concludes that Liquidity ratio and Loan to deposit ratio have an impact in influencing the financial performance of listed DMB's in Nigeria. It is therefore recommended that the listed DMBs should pay attention on their liquidity by increasing its level through prudent spending, aggressive deposit and debt recovery. Regulatory agencies such as Nigerian Deposit insurance commission (NDIC), Central bank of Nigeria and the Board of directors should mandate the increase in percentage of loans that DMB's give to customers so as to increase their performance.

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Determinants of Liquidity Management: Evidence from Nigerian Banking Sector

Cited by 11 publications

References 33 publications

Profitability determining factors of banking sector: Panel data analysis of commercial banks in South Asian countries

Profitability determining factors of banking sector: Panel data analysis of commercial banks in South Asian countries

Influence of Liquidity and Profitability on Profits Growth of Nigerian Pharmaceutical Firms

Liquidity Management and Financial Performance: Evidence from Listed Deposit Money Banks in Nigeria

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