The Insured Banks’ Portfolio Structure and Liquid Assets Management in Nigeria

Abstract

The study examines the relationship between asset portfolios and liquid assets of insured banks such as commercial (Money Deposit), primary mortgage, and microfinance banks in Nigeria. The study population comprises all commercial banks, primary mortgage banks, and microfinance banks that were licensed and regulated by the Central Bank of Nigeria between 1992 and 2022. The relevant data for the study were secondary sourced and gathered from the Central Bank of Nigeria's reports and the banks' annual reports for the study period. Multiple regression analysis, covariance analysis, and co-integration tests were used to analyze the data. The results revealed that there exist mixed results from the three banks (the commercial banks, the microfinance banks, and the mortgaged banks). It reveals that all variables have positive and significant impact on liquid assets except loans and advances, savings, and fixed deposits respectively, which were found not to be significant determinants of portfolio structure on the liquidity position of commercial banks, microfinance banks, and mortgage banks. Similarly, .deposits and reserves have a significant effect on mortgage banks' liquid assets. Furthermore, deposits kept with the Central Bank have a positive and significant impact on commercial banks' liquid assets, Based on these findings, it is suggested that the Nigerian insured banks (commercial, primary mortgage, and microfinance) take these ties into account while managing their portfolios.