LIQUIDITY MANAGEMENT AND FINANCIAL PERFORMANCE OF LISTED DEPOSIT MONEY BANKS IN NIGERIA

This study investigates the effect of liquidity management on the financial performance of listed deposit money banks (DMBs) in Nigeria from 2014 to 2023. Specifically, it examines the impact of Debt-to-Asset Ratio (DAR) and Cash-to-Deposit Ratio (CDR) on Earnings Per Share (EPS) of tier-one banks. The study adopts an ex post facto research design, utilizing secondary data extracted from audited annual financial reports of six tier-one Nigerian banks: First Bank, UBA, GTCO, Access Bank, Zenith Bank, and Ecobank Transnational Incorporated. Data were analysed using descriptive statistics, correlation analysis, and panel least squares regression. Descriptive results indicate variability in EPS, DAR, and CDR across the sampled banks, with EPS showing high dispersion. Correlation analysis reveals a positive but weak relationship between DAR and EPS, while CDR exhibits a weak negative correlation with EPS. Regression results show that DAR has an insignificant positive effect on EPS, whereas CDR demonstrates a marginally significant positive effect on profitability. The findings highlight that liquidity management plays a crucial role in optimizing bank performance, with effective cash holdings enhancing financial outcomes. The study recommends that Nigerian banks maintain an optimal balance between liquidity and leverage to ensure sustainable profitability.