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| Effect of Assets and Liabilities Management on the Financial Performance of Deposit Money Banks in Nigeria |
DR. KAZEEM B. L. O and ADEOYE E.O
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Abstract:
This research appraised the effect of Assets and Liabilities Management on the financial performance of Deposit Money Banks in Nigeria. It specifically examines the effects of deposits, loans and advances and shareholders' funds on the Profit after Tax (PAT) of First Bank, Zenith Bank and Wema Bank. Annual statistical bulletin and audited financial statement of the three selected Nigerian Deposit Money Banks were used for the analysis. A purposive sampling technique was adopted. Analysis revealed that the independent variables identified in the study are statistically significant at 5% confident level. Also it is revealed that Deposit from Customers (DL) has stronger effect on profitability of DMBs compared to CLA (Customers Loans and Advances) and SHF (Shareholder's fund), the beta coefficient of 1.74E+12 reveals this findings, also the p-val showing 0.0000 affirms this findings, as the lower the p-val the higher the confidence in the rejection of the null hypothesis. In addition to the findings, Sum squared residual value showing 4.59E+27, which reveals the ambiguity of the error term. The study concluded that a proper management of assets and liabilities increases the financial performance of deposit money banks in Nigeria and recommends that Banks should engage in proper monitoring of the loan management in order to reduce the incidence of high rate of non-performing loan and ensure enough diversity of its funds in order to ensure maximum profitability. Also, they should also consider factors such as growth of the economy, inflation rate, monetary policies etc that may affect financial performance.
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