Title: Assets And Liabilities Derivatives And Financial Performance Of Deposit Money Banks In Nigeria
Authors: EMO, Iditere Dauda, Prof. OSUJI, C. C. & Prof. ONUORAH, A. C. (F, CIFIAN)
Volume: 9
Issue: 3
Pages: 115-122
Publication Date: 2025/03/28
Abstract:
This study explored the impact of asset and liability derivatives on the financial performance of Nigerian DMBs from 2015 to 2024. It specifically examined the relationship between Derivative Financial Assets (DFA), Cash and Cash Equivalent Derivative (CCED), Derivative Trading Income (DTI), Derivative Financial Liabilities (DFL), Loan and Advance to Customers (LADC), and financial performance, measured by Profit After Tax (PAT). Data were sourced from the annual reports of 10 DMBs, and analysis was conducted using descriptive statistics, correlation analysis, and multiple regression via the OLS method in E-VIEW 9.0. Findings revealed that DFA, DTI, DFL, and LADC significantly influenced PAT, while CCED had no substantial effect. The study concluded that asset and liability derivatives enhance financial statement accuracy and found a strong link between liability derivatives and DMB performance in Nigeria. Recommendations includes: Regulators should continuously monitor banks' derivative activities to ensure they contribute to a stable and sound banking system. Banks should prioritize cash and cash equipment availability, as they are crucial for long-term sustainability.