IMPACT OF LIQUIDITY ON PERFORMANCE OF DEPOSIT MONEY BANKS IN NIGERIA (A STUDY OF GUARANTY TRUST BANK)

ABSTRACT This study examines the impact of liquidity performance in commercial banks, using Guaranty Trust Bank as a case study. The research aims to analyze the relationship between liquidity management and the overall stability and profitability of banks. Secondary data were sourced from textbooks, journals, magazines, and newspapers to provide a comprehensive understanding of liquidity management practices and their implications. Findings from the study indicate a positive relationship between effective liquidity management and the sustainability of commercial banks. Proper liquidity management ensures that banks can meet their short-term obligations, maintain customer confidence, and support economic growth. Conversely, poor liquidity management can lead to financial distress and instability within the banking sector. Based on these findings, the study recommends that banks should adopt prudent credit policies when extending loan facilities to customers to minimize the risk of loan losses Additionally, enhancing managerial competence in liquidity management and improving asset quality should be prioritized to strengthen the banking system and ensure long-term financial stability.