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- No of Pages: 59

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Introduction:

Abstract

This study examined the impact of liquidity performance in commercial using First Bank of Nigeria Plc as case study. Secondary data used in this study were carried from text books, journals, magazines and newspaper. Our findings indicate that there was a positive relationship between liquidity management and the existence of any banks. Based on this findings we recommend that should be prudent in extending credit facilities to their client/customers to avoid problem of load loss management and competence in banking system should be enhanced to increase asset quality.

Table of Content

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Introduction

The impact of liquidity position in management of financial institution and other economic unit have remained fascinating and intriguing, though very elusive in the process of in investment analysis visa- visa bank port folio management.



There appears to be an interminable argument in the literature over the years on the roles, meaning and determinants of liquidity and credit management. The Nigeria financial environment has noticed increase in credit which has become a problem to the country.



Credit control described as to maximize the value of the firm by achieving a trade a trade off purpose of credit control is not to maximize sales or to minimize the risk of bad debt.

In fact the firm should manage it credit in such a way that sales are expanded to an extent to which risk remains within an acceptable unit. These costs include the credit administration expenses bad debt, losses and opportunity cost of the fund field up in receivables, the aim of liquidity management should be to regulate and control these cost that cannot be eliminated together.



According to Begg, fisher and Rudiger (1991:130) liquidity refers to the speed and certainty with which an asset can be converted back into money (cash, income) whenever the Asset holder desires, money itself is the most liquidity asset o all liquidity management seeks to ensure attainment of the short term objective.



A liquid bank is one that stores enough liquid assets and cash together with the ability to raise funds quickly from other source to enable it meet its payment obligation and financial commitment in a timely manner.



Therefore according to Ngwu (2006:36) liquidity management is the act of storing enough funds and raising funds quickly from the market to satisfy depositor loan customer and other parties with a view to maintain public confidence.