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| Treasury Management Strategies And Bank Performance: A Retrospective Study Of First Bank Of Nigeria
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Uguta, Lawrence Ebiwari (M.Sc), Dr. Awu, Ebiasuode, Dr. Darius, Blessing, Dr. Amanawa, David Ebiegberi
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Abstract:
The study investigates the effect of investment in treasury management and its strategies on bank performance in Nigeria (1996 to 2017). The study's main objective is to examine the impact of Treasury management strategies on bank performance, using the First Bank of Nigeria as a case study. The variables of the study are Treasury management strategies (Treasury bill, asset liability management, and cash management strategies) as its independent variable and bank performance (return on asset, return on equity, and return on shareholders' fund) as its dependent variable. Econometric techniques, including Augmented Dickey-Fuller and PP for unit root tests, Johansson co-integration technique for a long run relationship, Granger causality test, and Ordinary Least Square (OLS) regression analysis were used to test the nine hypotheses. The study revealed that although investment in the Treasury bill has a positive effect on Return on Asset (ROA), Return on Equity (ROE), and Return on Shareholders' Fund (ROSF), its serving conditions are adverse to the banks' performance. This position is even aggravated by the unfavorable policies made by regulatory authorities. The study also reveals that asset liability management does not significantly affect Return on Equity (ROE) and Return on Shareholders' Fund (ROSF). The study thus concludes that cash management strategies do not have a significant effect on return on assets (ROA), return on equity (ROE), and return on shareholders' funds (ROSF) and do not increase performance. Among the recommendations is that regulatory bodies should formulate policies to enhance interest rates for investment and strong management bodies to regulate the banks' assets and cash to boost productivity and performance.
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