FINANCIAL ASSETS AND PERFORMANCE OF DEPOSIT MONEY BANKS IN NIGERIA

Abstract

This study determined the relationship between financial assets and performance of deposit money banks in Nigeria. Two research questions and two null hypotheses were formulated to guide the study.  Secondary data adopted from United Bank for Africa Plc Annual Report - 31 December 2018 were employed for the period under review. The findings were subjected to linear regression using SPSS ver. 22 which showed that there is positive and significant relationship between cash equivalents and return on investment of deposit money bank. It also indicated that there is positive and significant cash equivalents and return on equity of deposit money bank and those financial assets have significant relationship with performance of deposit money banks in Nigeria. Conclusively, financial asset deals with non-physical asset whose value is derived from a contractual claim. Financial assets are usually more liquid than other tangible assets, such as commodities or real estate, and may be traded on financial markets. Financial assets are classified by deposit money banks into five major categories: cash and bank balances, financial assets held for trading, derivative assets, loans and advances to banks and loans and advances to customers.  It is recommended that banks should make availability of cash and cash equipment as it is bedrock for bank sustainability; that criteria for loans and advances should comply with the CBN regulations in order to avoid bad debt; that collateral should be provided by the borrower in terms of failure to redeem the said loans and advances; that CBN should create atmosphere for easy accessibility of loans and advances to small and medium enterprises.