2.3 LIQUIDITY VERSUS PROFITABILITY IN COMMERCIAL BANKING
2.4 SIGNIFICANCE OF LIQUITY RATIO
2.5 RATIONAL FOR LIQUIDITY RATIO REQUIREMENT
2.6 ACTORS AFFECTING LIQUIDITY IN COMMERCIAL BANK
2.7 FEDERAL GOVERNMENT STEPS TOWARDS SOLVING LIQUIDITY PROBLEMS IN COMMERCIAL BANKING
3.1 SUMMARY OF FINDINGS
Liquidity banks means, “The ease with which banks assets could be converted into cash”. The liquid assets include cash in the banks vault with the Central banks and to their government securities that have not been used as those assets is cash.
There are many reasons why a bank should have reasonable liquid assets in it assets portfolio, these include to be due to meet prompt demands for deposit withdrawals, that is the banks must maintain confidence and also be able to utilize profitable opportunities that may come out in future.
However, it should be noted that bank like most other business are profit oriented, operating to make profit for these share holders.
These profit could be realized only if there is enough depositors. The deposit will not come unless the depositors could be assured of the safely of their deposits to be assured. There has to be enough liquidity in the banks.
It is a known fact that action designed to make profit brings about illiquidity in the bank and versa.
Therefore, equilibrium has to be sought between the two these two extreme cases have been the constant concern of bank management.
Liquidity management involves provision for depositors withdrawals, short term cash requirement and cyclical and circular cash requirements. It also involves provisions to met with legal reserve requirements.
In Nigeria, the activities of the commercial banks are regulated by the banking act of 1970 as amended under the control of Central bank of Nigeria. The essence of these regulations were to maintain trust and confidence in banking systems as well as to achieve a special economic objective thus, in the period of mounting excess liquidity as was the case in the 1970’s, bank were expected to hold some of their assets equal to a certain percentage of their deposits in liquid for this is known as legal reserve requirement. The components of legal reserve requirements are, cash establishment securities issued by the Central banks.
The rational for the use of those instruments was to map out the excess liquidity in the economy and also to stop the inflationary trends in the economy.
The excess liquidity in the banking sector give rise to inefficiencies in banks operation. Bank staff were no longer polite since they had little outlets to invest money, banks have devised new method of attracting deposits from their customers thus, the recent innovations in the banking sector
(A CASE STUDY OF FIRST BANK AND UNION BANK PLC) TABLE OF CONTENT CHAPTER ONE 1.0 INTRODUCTION 1.1 BACKGROUND OF THE STUDY 1.2 STATEMENT OF PROBLEM 1.3 OBJECTIVE OF STUDY 1.4 RESEARCH HYPOTHESIS 1.5 SIGNIFICAN-CE OF THE STUDY 1.6 SIGNIFICANCE OF THE STUDY 1.7 SCOPE AND LIMITATION OF THE STUDY... Continue Reading
INTRODUCTION 1.1 BACKGROUND OF THE STUDY As competition between businesses geared up, if becomes imperative to turn, attention to customers needs and wants which are naturally insatiable. The marketing concept arose to challenge all other previous concept. Orjih (1998) in his book “Seminar in Banking and finance.”... Continue Reading
INTRODUCTION As competition between businesses geared up, if becomes imperative to turn, attention to customers needs and wants which are naturally insatiable. The marketing concept arose to challenge all other previous concept. Orjih (1998) in his book “Seminar in Banking and finance.” Concluded that marketing concept holds the key to... Continue Reading
This paper provides comprehensive analyses and prima facie evidences on determination of liquidity and asset management of selected Nigerian banks. The purpose of this study is to examine liquidity series of Nigerian banks with a view to indicating any weakness noticed. The study considers liquidity buffer of Nigerian banks and finds out how the... Continue Reading
(A Case Study Of First Bank Of Nigeria) ABSTRACT This research is titled “Liquidity problem in commercial banks” (A case study of first banks of Nigeria). The key objective of this research work is to find out impact of liquidity problem in Nigerian commercial banks. The project is expected to... Continue Reading
ABSTRACT Commercial banks in Nigeria have been facing a problem. These problem ranges from integrity factors location factor technological factor unstable management incompleteness of board members and unqualified personnel.Therefore this study was aimed at looking into these problems so as to ascertain... Continue Reading
CHAPTER ONE 1.0 INTRODUCTION 1.1 BACKGROUND OF THE STUDY Liquidity is the word that bankers use to describe the ability to satisfy demand for cash in exchange for deposit. A bank is considered to be liquid when it has in various forms and locations plus arrestment insecurities that are easily available at a short notice without loss or much loss... Continue Reading
ABSTRACT This project is a very crucial study for the Nigerian commercial banks. The study was motivated by the necessary to establish a way in which liquidity problems in Nigerian commercial banks. Shall be tackled. Also it is a known fact that this work dwelt much on the effect of liquidity problems in Nigerian commercial banks with reference to... Continue Reading
ABSTRACT This research work is conducted as part of the requirement for the Higher National Diploma [HND] in Accounting. It examine the liquidity management of commercial banks in Nigeria with more emphasis on their investment, liquidity and profitability position in order to find out why commercial bank need to be more liquid then any other... Continue Reading
ABSTRACT This project is a very crucial study for the Nigerian commercial banks. The study was motivated by the necessary to establish a way in which liquidity problems in Nigerian commercial banks. Shall be tackled. Also it is a known fact that this work dwelt much on the effect of liquidity problems in Nigerian commercial banks with... Continue Reading