Journal • CITN Journal

Editorial Board

Editor-in-Chief

Professor Rafiu Oyesola Salawu

Department of Management & Accounting, Faculty of Administration, Obafemi Awolowo University, Ile-Ife

Managing Editor

Professor Godwin Emmanuel Oyedokun

Department of Management & Accounting, Lead City University, Ibadan, Nigeria

Editorial Board Secretary

Mary-Fidelis Chidoziem Abiahu

Director, Research and Professional Standard, Chartered Institute of Taxation of Nigeria

Editorial Board Members

Professor Chinedum Nathaniel Nwezeaku

Federal University of Technology, Owerri

Professor John Adeoti

Nigeria Institute of Social and Economic Research (NISER), Ibadan

Professor Uche Jack-Osimiri

Faculty of Law, River State University, Port Harcourt

Professor Aruwa Suleiman Akwu-Odo Salihu

Nasarawa State University, Keffi Nasarawa State Nigeria

Dr. Eiya Ofiafoh Ofiafoh (Associate Professor)

Department of Accounting, University of Benin, Benin City, Nigeria

Dr. Stephen Chukwuemeka Mark Abani

MCSA Worldwide Projects Limited, Abuja, Nigeria

Dr. Kenny Adedapo Soyemi

Department of Accounting, Olabisi Onabanjo University, Ago Iwoye, Ogun State, Nigeria

Professor Joseph Uchenna Uwaleke

Department of Banking & Finance, Nasarawa State University, Keffi Nasarawa State, Nigeria

Barrister Chukwuemeka Eze

Faculty of Law, Nasarawa State University, Keffi Nasarawa State, Nigeria

Mr. Simon Nwanmaghyi Kato

Federal Inland Revenue Service, Chairman’s Office, Abuja, Nigeria

ASSESSING LIQUIDITY DETERMINANTS AND CASH HOLDINGS DECISIONS OF SYSTEMATICALLY IMPORTANT BANKS (SIBS) IN NIGERIA: THE PRE AND POST ECONOMIC RECESSION EXPERIENCE

Description

ASSESSING LIQUIDITY DETERMINANTS AND CASH HOLDINGS DECISIONS OF SYSTEMATICALLY IMPORTANT BANKS (SIBS) IN NIGERIA: THE PRE AND POST ECONOMIC RECESSION EXPERIENCE

Authors

Ugochukwu J. Nwoye, Nonye J. Ezenwafor and Emma I. Okoye

Abstract

This study to evaluates the relationship between liquidity determinants and the cash holding decisions of Systematically Important Banks (SIBs) in the pre and post-economic recession periods in Nigeria. Specifically, it intends to determine to ascertain the relationship between firm liquidity and cash holding decisions of SIBs in the pre and post-economic recession period in Nigeria. It also intends to determine the relationship between Investing activities, Financing activities and Cash holdings of SIBs in Nigeria. The secondary sources of data collection were solely utilized, hence, the adoption of the ex-post facto research design. A total of seven (7) SIBs in Nigeria were purposively sampled, and extracts from their respective financial statements for the pre-economic recession (2011 - 2014) and post-economic recession (2015 – 2018) periods were duly subjected to relevant analyses using Altman Z-Score model for emerging markets, Pearson Correlation, and the Multiple regression statistical tools. Findings obtained from analyses showed that there is a significant relationship between firm liquidity and cash holding decisions of SIBs in the pre and post-economic recession period in Nigeria. It was also observed that the relationship between selected SIBs’ Investing activities, Financing activities and Cash holdings significantly differed. The study thus concluded that although many financial institutions in Nigeria like the (SIBs) were noted to hold cash for varying reasons, most of them maintain cash holdings for investment decision’s purpose. The study, therefore, recommends that proactive review effort should be made to understand why Systematically Important Banks’ liquidity status across two different periods increased in order to timely rescue possible sick banks from failing. It also recommends that discretion should be adopted by regulatory agencies of the banking sector in Nigeria to ascertain from time-to-time reasons why Systematically Important Banks chose to hold cash to help minimise/curtail risks of unprofitable cash outflow decisions among SIBs in Nigeria.

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