ABSTRACT

Liquidity and profitability are two opposing goals of the commercial banking system. Bank managers continue to experience the conflict of balancing them. The extent to which the over-riding objective is realized depends on the ability of the bank managers to decide on the optimal portfolio size and structure which require striking a balance between the conflicting objectives of liqdity and profitability. The study was condu d in order to assess the effects of liquidity management on Jitability of commercial bank in Nigeria: (A Case study of United Bank for Africa Plc. (UBA). In this study the researcher tried to postulate an atomy of effactive liquidity management using secondary data. Data for this study were analyzed on tables, and two hypotheses were 'alidated using correlation analysis. The test rejected fti ivo null hypotheses. Thus, submittinq the option that liquidity management has a significant relationship with the profitability of commercial banks in Niqeria and that total deposit of United Bank for Africa has significance influence on loan/advances given to customers. Based on the finding useful recommendations have been made to government and th concerned bodies. ThUS, the study revealed the following recorr . 1ati0n. That Commercial Banks should use short term funds to finance short-term assets since the use of short-term funds to finance long-term investment connotes serious liquidity jrOblems which ma' finally leads to fai(ure. Commercial banks should double-up and involvemore depositors to make deposit and also create awareness and campaign to encourage people on the benefit of keeping mDney in the bank. ExcesS ve loan granting should be discouraged as illiquidity can have dramatic and rapid adverse effects on even well capitalized and recapitalized banks. Competent managers should be employeJ on merit and not on sentiments to manage the bank.