The Influence of Bank Liquidity on Lending Behaviour of Commercial Banks in Nigeria (2006-2020)
Abstract
The relevance of Commercial Banks and their lending activities in Nigeria necessitates concern about the liquidity condition of these banks. This is particularly pertinent, given the spate of recurring unpalatable incidences in the Nigerian banking sub-sector even after the 2005 consolidation. The objective of the study was to examine the influence of bank liquidity on the lending behaviour of Commercial Banks in Nigeria. Twelve (12) listed Commercial Banks were selected using the purposive sampling technique. The ex post facto research design was adopted and secondary data drawn from the sampled Commercial Banks from 2006 to 2020 were used for analysis. The data were analyzed using descriptive statistics and regression analysis. The results revealed that bank liquidity significantly influenced the lending behaviour of Commercial Banks. However, the loan-to-total assets ratio was found to exert the highest relative influence on the lending behaviour of Commercial Banks. It was recommended, among others, that Commercial Banks should prioritize the maintenance of a dynamic loan-to-total assets ratio. Also, the Central Bank of Nigeria and other regulatory bodies should be more proactive in ensuring Commercial Banks' liquidity and sustainability.
Authors
- Ofonime O. Jeremiah
+2348038906190
Department of Accounting,
University of Uyo.
PMB 1017, Uyo
ofonimejeremiah@uniuyo.edu.ng - Essien Akpanuko
+2348023223518
Department of Accounting,
University of Uyo.
PMB 1017, Uyo
essienakpanuko@uniuyo.edu.ng - Ikechukwu Acha
+2348036057080
Department of Banking and Finance,
University of Uyo.
PMB 1017, Uyo
ikechukwuacha@uniuyo.edu.ng