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.
1.1 Introduction
In this section, Liquidity Management in Banks: a Study of Selected Commercial Banks in Nigeria (2000-2009) is discussed, with relevant and recent citations. As a prelude to other parts of this study, this chapter will discuss the background upon which this study was initiated, the statement of problems that led to this study, the aim and objectives of the study. Others are significance of the study, scope of work, research hypothesis and questions, limitation of the study and definition of terms.