ASSET-LIABILITY MANAGEMENT AND PERFORMANCE OF LISTED DEPOSIT MONEY BANKS IN NIGERIA

Abstract

Background: The development of asset-liability management was a response to the challenge of financial intermediation risks. Aim: This research looked into how asset-liability management impacted the economic success of DMBs, as quoted on the NGX, over a decade. Information was gathered from these banks' financial statements from 2013 to 2022. Methods: Analysis used descriptive, correlation, panel, and generalized least square techniques. The study categorized asset-liability management into asset management and liability management, each with its own performance indicators. Asset management's indicators included Asset Coverage Ratio (ACR), Total Asset Turnover (TAT), and Working Capital Turnover (WCT); liability management's indicators were Cash Flow Ratio (CFR), Capitalization Ratio (CAPR), Current Ratio (CR), and Return on Asset (ROA). Results: The study found that measures like ACR and TAT, under asset management, positively and significantly affect ROA, whereas WCT, a measure of asset management, negatively and insignificantly affects ROA. Conclusions: Conversely, measures under liability management, such as CFR and CR, positively influence ROA, whereas CAPR negatively impacts it.