BANK LIQUIDITY AND PERFORMANCE OF LISTED DEPOSIT MONEY BANKS IN NIGERIA

There have been divergent views on the impact of corporate liquidity on profitability of firms and this was a stimulant to this study in order to find out the reality. The main objective of the paper is to examine the impact of liquidity on profitability of listed Deposit Money Banks in Nigeria for the period 2005 2014. The study used ex-post factor and correlational research designs. The population of the study was the 17 listed Deposit Money Banks in Nigeria as at 2014 and a sample size of 9 banks was obtained using Yaro Yamane adjusted formula. Secondary data was collected from audited annual reports and accounts of the 9 banks used. The study used panel multiple linear regression and correlation as techniques of data analysis. It was found that corporate liquidity has positively, strongly, and significantly influenced the profitability. Bank Liquidity and Performance of Listed Deposit Money Banks in Nigeria of listed Deposit Money Banks in Nigeria during the study period. The study concludes that liquidity plays a crucial role in increasing the profitability of listed Deposit Money Banks in Nigeria because it assists in the survival and growth of the banks. It is recommended that the management of listed Deposit Money Banks in Nigeria should adhere strictly to CBN directives on liquidity ratio for maintaining a prevailing percentage of their total customers’ deposit as liquidity as this would assist them in achieving their short-term objectives and prevent the tied up of capital.