Effect of Asset-Liability Management on Bank Survival of Selected Deposit Money Banks in Nigeria
DOI:
https://doi.org/10.51137/wrp.ijarbm.468Keywords:
Asset, Liability, Bank, DMBs, NigeriaAbstract
Financial earnings have long been part of the primary goals of Deposit Money Banks (DMBs) around the world. The relationship between asset-liability management and bank earnings is still being researched, primarily in the aftermath of the global financial crisis (GFC) of 2007-2009, which led to bank mergers and banking system reformation across nations. As a result, intellectuals and bank managers worldwide were concerned with how to connect asset-liability in achieving sound bank earnings to expand the function of the bank intermediary. The main objective of the study is to examine the effect of asset-liability management (cash and cash equivalent, net loan portfolio, net fixed assets, total deposit, total long-term funding) on bank survival (capital adequacy ratio) among selected deposit money banks in Nigeria. The study employed ex-post facto research design and used secondary data collected from selected deposit money banks in Nigeria of the study variables within the periods of 2010 to 2021. The study employed panel regression method of analysis and found that asset-liability structure in terms of (cash and cash equivalent, net loan portfolio, net fixed assets, total deposit, total long-term funding) significantly affect bank survival (capital adequacy ratio) among selected deposit money banks in Nigeria. The study concluded that asset-liability structure via cash and cash equivalent, net loan portfolio, net fixed assets, total deposit, total long-term funding determine bank survival (capital adequacy ratio) among selected deposit money banks in Nigeria. Thus, the study recommended that selected bank top management should ensure that cash and cash equivalent of the deposit money banks are prudently managed to grow year on year in the right mix and without contravening the statutory guidelines to survive for long period.
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