publication . Article . 2015

Causal Relationship between Liquidity and Profitability of Nigerian Deposit Money Banks

Odunayo Magret Olarewaju; Oluwafeyisayo K. Adeyemi;
Open Access
  • Published: 01 Jan 2015 Journal: International Journal of Academic Research in Accounting, Finance and Management Sciences, volume 5 (eissn: 2225-8329, Copyright policy)
  • Publisher: Human Resources Management Academic Research Society (HRMARS)
The aim of this paper is to examine the existence and direction of causality between liquidity and profitability of deposit money banks in Nigeria. Fifteen quoted banks out of the existing nineteen banks were selected for the study. They are; Guarantee Trust bank, Zenith bank, Skye bank, Wema bank, Sterling bank, First City Monument bank, United Bank for Africa, Eco bank, First bank, Access bank, Diamond bank, Unity bank, Fidelity bank, Union bank and IBTC bank. Pairwise Granga Causality test was carried out to determine the presence and direction of causality between banks’ liquidity and profitability. From the finding of this study, at 5% and 10% level of sign...
Persistent Identifiers
free text keywords: Deposit Money Banks, Liquidity, Unidirectional, Bidirectional, Granga Causality, Monetary reform, Economics, Reserve requirement, Chinese financial system, Bank reconciliation, Official cash rate, Bank run, Financial system, Accounting, business.industry, business, Bank rate, Open market operation
Related Organizations

1. Agbada A.O and C.C Osuji (2013). The efficacy liquidity management and banking performance in Nigeria. International Review of Management and Business Research. Vol.2, Issue 1.

2. Bordeleau, E. and C. Graham (2010). The impact of liquidity on bank profitability. Bank of Canada working paper 38. [OpenAIRE]

3. Dezfouli M.H.K, H. Ali and S. Marshid (2014). Inspecting the effectiveness of liquidity risk on banks' profitability. Kuwait chapter of Arabian journal of Business and Management Review. Vol. 3, No 9.

4. Global Association of Risk Professionals (2013). Liquidity risk management overview and practitioner's challenges of Commercial banks. Dubai.

5. Lartey V. C, S. Antwi and E. K Boadi (2013). The relationship between liquidity and profitability of listed banks in Ghana. International journal of Business and Social Science. Vol.4, No 3.

6. Maaka Z.A (2013). The relationship between liquidity risk and financial performance of commercial banks in Kenya. A research submitted to school of business, University of Nairobi.

7. Mabwe K. and W. Robert (2010). A Financial Ratio Analysis of commercial bank performance in South Africa. Journal of Africa Review of Economics and Finance. Grahamstown, South Africa. Vol. 2, No 1

8. Mahshid, S. (2012). Impact of Liquidity Asset on Iranian Bank profitability. International conference on management, behavioural sciences and Economic issues. Penang, Malaysia.

9. Manish, K.and C.Y Gbanshyam (2013). Liquidity risk management in bank; a conceptual framework. AIMA Journal of Management and Research. Vol.7, Issue 2/4.

10.Nwaezeaku, N.C (2006). Theories and Practice of Financial Management. Owerri. Ever Standard Publishing.

11.Nzotta, S.M (2004). Money, Banking and Finance: Theory and Practice. Owerri.

12.Olagunj, A., O.D Adeyanju and O.S Olabode (2011). Liquidity management and commercial banks' profitability in Nigeria. Research Journal of Finance and Accounting. Vol. 2, No7/8 13.Purbaningsih Y. P (2014). The effect of liquidity risk and non performing financing (NPF) ratio to commercial Sharia bank profitability in Indonesia. DOI: 10.7763/ IPEDR. Vol 73. No12 14.Sushil S. and N. Bivab (2013). Determinants of banks liquidity and their impact on financial performance in Nepalese Commercial banks. Unpublished thesis submitted to Ace Institute of Management, Pokhara University.

Any information missing or wrong?Report an Issue