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LIQUIDITY MANAGEMENT IN BANKS: A STUDY OF SELECTED COMMERCIAL BANKS IN NIGERIA

ABSTRACT

This study sought to examine the challenges of Liquidity Management in Nigeria’s Commercial banks. The study identified some of the notorious factors responsible for most banks’ liquidity problems such as high ratio of Non-performing loans (NPL), excessive risks concentration, fluctuations in statutory Reserve requirements; Assets mismatch in portfolio selection, and Poor Corporate Governance. In order to tackle the magnitude of the problems, the researcher limited the scope of the study to ten year period (2000-2009) in First Bank, Access Bank and United bank for Africa PLC and established three specific objectives and related research questions to guide the study. The secondary data generated from the Financial Statements Reports and Accounts of the selected banks as well as the Central Bank of Nigeria (CBN) reports for the period was used to test and analyze the three hypotheses, based on the stated objectives and the related research questions, using a Parametric statistical sample paired t- test model and Pearson’s Correlation coefficient as the statistical tools. Based on the research findings, it was recommended among others that banks should strengthen their institutional capacity, exercise prudence in credit administration and avoid excessive risk exposure.CBN should also re-appraise the existing corporate governance code necessary and also embrace more pro-active mechanisms in the discharge of their oversight functions for sustainable banking sector liquidity, public confidence, safety and professionalism in banking practice.  

TABLE OF CONTENTS

Title Page                                    

Approval Page                              

Certification Page                         

Dedication                                   

cknowledgements                               

Abstract                                       

List of Tables                                 

CHAPTER ONE: INTRODUCTION

1.1    Background of the Study                    

1.2    Statement of the Problem                       

1.3    Objectives of the Study                      

1.4    Research Questions                              

1.5    Research Hypotheses                               

1.6    Significance of the Study                     

1.7     Limitations of the Study                     

1.8    Definitions of Operational Terms             

CHAPTER TWO:  REVIEW OF RELATED LITERATURE

2.1     Introduction                                               

2.2     The Theoretical Framework                       

2.3   Empirical Literature Review                         

2.4 Poor Corporate Governance Issues and Effects on Banking Sector Liquidity    

2.5     Effects of Poor Banking Supervision and  Regulatory Lapses on Banks’ Liquidity Management      

2.6     The Need for Liquidity Management and Banking Sector Solvency        2.7    Potential Sources of Commercial Banks’ Liquidity    

2.8Planning and Solving Liquidity Management Problems in Crisis Situations   2.9    Measurement and Governance of Liquidity Risk   

2.10 The  Determinants of Liquidity Position               

2.11 The Liquidity and Profitability Controversy          

2.12 Corporate Vision and Issues of Liquidity for the Selected Commercial Banks 

 2.13 Synopsis of Commercial Banking Activities in Nigeria        

 CHAPTER THREE: RESEARCH METHODOLGY

 3.1      Research Design                              

 3.2     Area of the Study                            

 3.3       Population Sample and Sample Techniques       

 3.4     Sources of Data Collection                    

 3.5        Model Specification                            

 3.6        Techniques for Data Analysis            

 3.7      Reliability of Test Instrument               

CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS

 4.1       Introduction                                               

 4.2       Data Analysis /Hypothesis Testing           

 4.3      Presentation of Result                                

CHAPTER FIVE:

SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS

 5.1       Introduction                               

 5.2       Summary and Discussion of Findings           

 5.3       Implication of Findings                       

 5.4        Conclusion                                

 5.5       Recommendations                             

 5.6    Contribution of the Study to Future Knowledge       

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