Effects of asset-liability structure on financial survival of selected deposit money banks in Nigeria

Abstract

One of the key benchmark deposit money banks must monitor and take into account when making operational and financial decisions is how asset-liability structure will enhance bank financial survival proxied with capital adequacy ratio. Without sound capital adequacy ratio over time, commercial banks or deposit money banks (DMBs) cannot traditionally carried out the role of financial intermediaries which in turn threaten bank financial survival. The aim of the study is to establish effect of asset-liability structures on financial survival proxied with capital adequacy ratio of selected DMBs. Expost facto research design and panel regression technique were used within the period of 2010 and 2021. Finding revealed that asset-liability structures in terms of cash and cash equivalents, net loan portfolio, net fixed assets, total deposit, and total long-term funding affect financial survival of selected DMBs in Nigeria. Thus, the study suggested that bank top management should ensure that there should not be mis-match between assets-liabilities and both asset-liability should be prudently managed to grow year on year in the right mix and without contravening the statutory guidelines so that the DMBs can survive for long period.