EconPapers    
Economics at your fingertips  
 

Effect of Liquidity Risk on Shareholders Value of Listed Commercial Banks in Nigeria

Nwala, Maurie Nneka and Osuagwu, Hope Ikechukwu
Additional contact information
Nwala, Maurie Nneka: Department of Banking and Finance Faculty of Administration, Postal: Nasarawa State University, Keffi, Nigeria, https://www.afarng.org/mjms/
Osuagwu, Hope Ikechukwu: Department of Banking and Finance Faculty of Administration, Postal: Nasarawa State University, Keffi, Nigeria, https://www.afarng.org/mjms/

Multidisciplinary Journal of Management Sciences, 2022, vol. 4, issue 2, 39-50

Abstract: Liquidity risk reflects the insufficient liquid assets to meet bank's obligation. The study examined the effect of liquidity risk on shareholders value of listed commercial banks in Nigeria. Liquidity risk was proxied by loan to deposit and current ratio, while shareholders value was proxied by Tobin's Q. The panel data were collected from the individual bank annual financial report of the listed commercial banks in Nigeria. Ordinary least square regression was used to analyze the hypothesis significant effect between liquidity risk and shareholders value with the aid of E-views 11. The results revealed that loan to deposit and current ratio had a negative significant effect on Tobin's Q of deposit money banks in Nigeria. In line with the findings, this study recommends that the management of DMBs should increase the current assets held in as cash ratio with marketable securities, so that it could yield higher return before paying its liabilities. Also, with the increase of loan to deposit ratio to 65%, the Central Bank of Nigeria should employ other measures to control and make sure loans are given to customers, not diverted for another purpose.

Keywords: Current ratio; Liquidity risk; Loan to Deposit; Tobins Q; Shareholders value (search for similar items in EconPapers)
Date: 2022
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.afarng.org/wp-content/uploads/2022/12/ ... ssue-2-June-2022.pdf Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ris:amjoms:0054

Access Statistics for this article

Multidisciplinary Journal of Management Sciences is currently edited by Muhammad Akaro Mainoma, Godwin Emmanuel Oyedokun and Suleiman A. S. Aruwa

More articles in Multidisciplinary Journal of Management Sciences from Association of Forensic Accounting Researchers (AFAR) Contact information at EDIRC.
Bibliographic data for series maintained by Daniel Akanbi ().

 
Page updated 2025-03-19
Handle: RePEc:ris:amjoms:0054