Effect of Liquidity Risk on the Profitability of Commercial Banks in Nigeria (Published)
This study examined how liquidity risk affects the profitability of commercial banks in Nigeria, using Return on Equity (ROE) as the measure of profitability. The study focused on three key liquidity indicators: Loan-to-Deposit Ratio (LDR), Cash Reserve Ratio (CRR), and Liquidity Coverage Ratio (LCR). Data were collected from financial statements of selected banks covering 2014 to 2023, and analysis was done using Panel Ordinary Least Squares (OLS) regression. The results showed that LDR had a significant positive effect on ROE (coefficient = 0.040697, p-value = 0.0003), meaning that banks that lend out more of their deposits tend to be more profitable. However, CRR and LCR had negative but insignificant effects on ROE, with coefficients of -0.053538 (p-value = 0.7526) and -0.018040 (p-value = 0.3136), suggesting that holding more reserves or liquid assets slightly reduces profitability but does not have a strong impact. The model explained 93% of the changes in ROE (R² = 0.936993, Adjusted R² = 0.926313), and the F-statistic (87.73978, p-value = 0.000000) confirmed that the overall model was statistically significant. The study recommends that banks optimize their LDR to increase profitability while maintaining enough liquidity to avoid financial risk. It also suggests that banks adopt better asset allocation strategies to reduce any negative effects of CRR and LCR.
Keywords: Cash Reserve Ratio, Commercial Banks, Loan to Deposit Ratio, Nigeria, Return on Equity, and liquidity coverage ratio
Effect of Sustainability Accounting and Reporting on Financial Performance of Firms in Nigeria Brewery Sector (Published)
This paper evaluates the effect of sustainability accounting on the financial performance of listed manufacturing firms in Nigeria. Firms used for the study were chosen from the Nigerian brewery sector. Data were sourced from the financial statements of three sampled firms. Data were analysed using the ordinary linear regression. The study reveals that sustainability reporting has positive and significant effect on financial performance of firms studied. Following the findings, the study recommends that firms in Nigeria should invest reasonable amount of their earnings on sustainability activities while specific accounting templates be articulated by professional accounting regulating bodies to guide firms’ reportage on sustainability activities. The Financial Reporting Council of Nigeria (FRC) and others alike should make sustainability reporting compulsory while adequate sanctions are spelt out and enforced on defaulting organizations to serve as a deterrent
Keywords: Financial Performance, Nigeria, Return on Assets, Return on Equity, sustainability accounting