Abstract:
Using aggregated data, the study looked into the impact of asset-liability management on banking performance. The investigation was conducted from the year 2000 to the year 2020. Bank loans and advances, aggregate bank deposits, loan-to-deposit ratio, non-performing loan, and bank size are among the asset-liability management proxies that are taken into account. Meanwhile, the aggregate return on equity was used to assess bank performance. The study's data came from the Statistical Bulletin 2020 of the Central Bank of Nigeria. Using Econometric Views (E-Views) version 9.0, the researchers used the ARDL short and long run estimate technique. According to the study, bank loans and advances, aggregate bank deposits, and the loan-to-deposit ratio have a favorable short- and long-term impact on bank performance. In the long term, however, bank size did not sustain our short run negative sign, reporting a positive coefficient instead. Finally, non-performing loans have a detrimental long-term and short-term impact on bank performance. As a result, we argue that asset-liability management induces both at the aggregate and individual levels, with aggregate bank deposit and non-performing loan being the only important determinants of bank performance. As a result, we urge that bank management focus more on aggressive deposit mobilization approach in order to support improved asset-liability management. Non-performing loan monitoring, in particular, requires extra care.
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