Moderating Effect of Risk Management Committee Expertise on the Relationship between Liquidity Risk and Value of Listed Deposit Money Banks in Nigeria

The effect of liquidity risk on value of banks has become a global phenomenon, even the well performing banks are suddenly plunged into crisis if liquidity risk is not carefully monitored and managed. One of the main gaps of the study is the introduction of moderator variable. The objective of the study is to examine the moderating effect of risk management committee expertise on the relationship between liquidity risk and value of listed deposit money banks in Nigeria. The study has been designed to cover a period of twelve (12) years (2013 - 2024). The ex-post facto (correlational) research design has been used. The 13 listed deposit money banks in Nigeria formed the population of the study out of which twelve (12) companies have been selected to form the sample. The multiple linear regression, correlation and descriptive statistics have been used to analyze the data. The risk management committee expertise has negatively insignificantly moderates the relationship between Liquidity Risk and Price to Book Value. Liquidity Risk has negative and insignificant effect on Price to Book Value, current assets should always be greater than current liabilities in order for banks to always fulfill or meet their debt obligations as they fall due, without having to sell their fixed assets at distressed prices.

liquidity risk, moderator variable, risk management committee expertise

1. Abba, H. I., Sabo, A. & John, J. (2023). Effect of risk management committee characteristics on the value of listed oil and gas companies in Nigeria. African journal of management and business research, 10(1), 68-77. Accessed, October, 2025. [Google Scholar] [Crossref]

2. Abubakar, A., Garba, A. & Sulaiman, A. S. (2020). Financial risk and financial performance of listed deposit money banks in Nigeria. Dutse International Journal of Social and Economic Research, 4(2), 1-12. https://www.researchgate.net/publication/344755727. Accessed June 2022 [Google Scholar] [Crossref]

3. Abubakar, A.H., Mansor, N. & Wan-Mohamad, W.I.A. (2021). Corporate tax avoidance, free cash flow and real earnings management: Evidence from Nigeria. Universal journal of accounting and finance, 9(1), 86 - 97. DOI: 10.13189/ujaf.2021.090109. Accessed, June, 2022. [Google Scholar] [Crossref]

4. Adebayo, O.S., Ifeanyi, O.P. & Abiodun, O.Y. (2020). Financial risk and financial performance of deposit money banks listed in Nigeria. International journal of business and management review, 8(4), 78-100. [Google Scholar] [Crossref]

5. Adebayo, O.S., Ifeanyi, O.P. & Abiodun, O.Y. (2020). Financial risk and financial performance of deposit money banks listed in Nigeria. International journal of business and management review, 8(4), 78-100. [Google Scholar] [Crossref]

6. Alhaj, A., Mansor, N. & Hashim, U.J. (2022). The effect of risk management committee and ownership concentration on firm performance in emerging markets: empirical from Malaysia. Journal of positive school psychology, 6(8), 3262-3284. Accessed, June, 2025 [Google Scholar] [Crossref]

7. Al-Nimer, M., Abbadi, S.S., Al-Omush, A. & Ahmad H. (2021). Risk management practices and firm performance with a mediating role of business model innovation. Observations from Jordan. Journal of risk and financial management, 14(1), 2-20. https://doi.org/10.3390/jrfm14030113. Accessed, July, 2022. [Google Scholar] [Crossref]

8. Alsaman, M.A., Abd Alhamid, A.A. & Abu krisha, T.Z. (2023). The role of risk management committee in firm performance and risk disclosure. An empirical study on the egyptian companies. The international journal of business in society, 7(1), 66-82. Accessed April, 2024. [Google Scholar] [Crossref]

9. Altarawneh, M.H. & Shafie, R. (2018). Risks and banks’ performance in Jordan. Academy of accounting and financial studies journal, 22(6), 1-15. [Google Scholar] [Crossref]

10. Ayodele, T.D. & Alabi, R.O. (2014). Risk management in Nigeria banking industry. Research journal of finance and accounting, 5(2), 131-136. [Google Scholar] [Crossref]

11. Ayuningtyas, E. S. & Harymawan, I. (2022). Risk management committee and textual risk disclosure. Journal of Management and Governance 10(2), 1-15,://doi.org/10.3390/risks10020030 Accessed September, 2023. [Google Scholar] [Crossref]

12. Burhamzah, R, Kadir, A.R. & Sobarsyah, M. (2019). Capital structure and its effect on firm value with financial performance as intervening variable in 2014-2018 (Case of manufacturing companies specializing in chemical industry). Global scientific journals, 7(12), 1099-1103. [Google Scholar] [Crossref]

13. Chen, L. & Chen, S. (2011). The influence of profitability on firm value with capital structure as the mediator and firm size and industry as moderators. Investment management and financial innovations, 8(3), 121-129. [Google Scholar] [Crossref]

14. Chioma, A.V., Okoye, N.E., Chidume, A.J. & Nnenna O.G. (2021). Assessing the effect of capital adequacy risk and liquidity risk management on firm value of deposit money banks in Nigeria. African Journal of Accounting and Financial Research, 4(1), 33-49). [Google Scholar] [Crossref]

15. Ewool, L.M. & Quartey, J.A. (2021). Evaluation of the effect of risk management practices on the performance of micro finance institutions. International journal of academic research in accounting, finance and management sciences, 11(1), 211-240. [Google Scholar] [Crossref]

16. Greuning, H.V. & Bratanovic, S.B. (2020). Analyzing banking risk: A framework for assessing corporate governance and risk management. Fourth edition. DOI: 10.1596/978-1-4648-1446-4. http://creativecommons.org/licenses/by/3.0/igo. Accessed, June, 2022. [Google Scholar] [Crossref]

17. Ibiam, O.A. & Chinedu, N.L. (2017). Effect of corporate governance on risk management of commercial banks in Nigeria. International journal of finance and accounting, 6(5): 145-153. DOI: 10.5923/j.ijfa.20170605.03. Accessed, July, 2022. [Google Scholar] [Crossref]

18. Iyinomen, O.D., Okoye, E. & Ifeoma O. (2019). Financial risk and performance of deposit money bank: evidence from west African countries. International journal of innovative finance and economics research, 7(4), 152-162. [Google Scholar] [Crossref]

19. Iyinomen, O.D., Okoye, E. & Ifeoma O. (2019). Financial risk and performance of deposit money bank: evidence from west African countries. International journal of innovative finance and economics research, 7(4), 152-162. [Google Scholar] [Crossref]

20. King, W.O. & Iwedi M. (2023). Liquidity risk management practices and profitability of banking firms in Nigeria. Journal of modern economy and management, 2(10),1-10. https://doi.org/10.53964/mem.2023010. Accessed, March, 2024. [Google Scholar] [Crossref]

21. Lamidi, W. A., Adebayo, A. O., Olorede, T. E. & Oyekanmi, M. O. (2022). Risk management committees’ characteristics and the financial performance of deposit money banks (DMBS) in Nigeria. J o u r n a l o f a c c o u n t i n g a n d ma n a g em e n t, 12(1), 109-120. Accessed, October, 2025. [Google Scholar] [Crossref]

22. Mardiana, Endah, P.P. & Dianata, A.W.M. (2018). The effect of risk management on financial performance with good corporate governance as a moderating variable: Management and economics journal, 2(3), 257-268. [Google Scholar] [Crossref]

23. Muriithi, J.G. (2016). Effect of financial risk on financial performance of commercial banks in Kenya (Doctoral thesis, Jomo Kenyatta University of Agriculture and Technology, Kenya 2016). [Google Scholar] [Crossref]

24. Obriki, S.T. & Peter, M. (2022). Risk management committee and financial liquidity of deposit money banks in Nigeria. International Journal of Business & Law Research, 10(4), 85-98. Accessed, April, 2023. [Google Scholar] [Crossref]

25. Odeke, S. & Odongo, J. (2014). Interest rate risk exposure and financial performance of commercial banks in Uganda. Research journal of finance and accounting, 5(2), 167-180 [Google Scholar] [Crossref]

26. Okoye, E.I. Adeniyi, S.I. & Jones, A.S. (2019). Fraud risk management and corporate performance of deposit money banks (DMBs) in Nigeria. Journal of accounting and financial management, 5(4), 33-46. [Google Scholar] [Crossref]

27. Olalekan, L.I., Mustapha, L.O., Irom, I.M. & Emily B.N. (2018). Corporate board size, risk management and financial performance of listed deposit money banks in Nigeria. European journal of accounting, auditing and finance research, 6(1), 1-20. https://www.researchgate.net/publication/322150552. Accessed, April, 2021. [Google Scholar] [Crossref]

28. Oluwagbemiga, O.E., Isaiah, O.O. & Esiemogie, I.P. (2016). The relationship between the risk management practices and financial performance of the Nigerian listed banks. Accounting and management information systems, 15(3), 565-587. [Google Scholar] [Crossref]

29. Owojori, A.A., Akintoye, I.R. & Adidu, F.A. (2011). The challenge of risk management in Nigerian banks in the post consolidation era. Journal of accounting and taxation, 3(2), 23-31. http://www.academicjournals.org/JAT. Accessed, March, 2020. [Google Scholar] [Crossref]

30. Philip, A.O. & Abisola, A.T. (2019). Impact of credit risk management on profitability of deposit money banks in Nigeria. International journal of economics, commerce and management, United Kingdom, vii (9), 254-268. http://ijecm.co.uk/ [Google Scholar] [Crossref]

31. Purwohandoko A. (2017). The influence of firm’s size, growth, and profitability on firm value with capital structure as the mediator: A study on the agricultural firms listed in the Indonesian Stock Exchange. International journal of economics and finance, 9(8), 103-110. URL: https://doi.org/10.5539/ijef.v9n8p103. Accessed, July, 2021. [Google Scholar] [Crossref]

32. Rahmawati, D.R. & Harymawan, I. (2022). The effect of voluntary risk management disclosure and risk management committee on firm value. Journal of theoretical and applied management, 15(3), 424-432. https://doi.org/10.1016/S0165-4101(01)00018-0 . Accessed May, 2023. [Google Scholar] [Crossref]

33. Reschiwati, R. Syahdina A. & Handayani S. (2019). Effect of liquidity, profitability, and size of companies on firm value. Utopía Praxis Latinoamericana, 25 (6), 325-331. https://www.redalyc.org/articulo.oa?id=27964115031 DOI: https://doi.org/10.5281/zenodo.3987632. Accessed, July, 2021. [Google Scholar] [Crossref]

34. Sabo U. (2017) corporate board attributes and financial performance of listed building materials companies in Nigeria (MSc dissertation, faculty of social and management sciences Bayero University Kano, 2017). [Google Scholar] [Crossref]

35. Sabrin, Sarita, B., Takdir, S. D. & Sujono, (2016). The effect of profitability on firm value in manufacturing company at Indonesia Stock Exchange. The international journal of engineering and science (IJES), 5(10), 81-89. [Google Scholar] [Crossref]

36. Sarun, A. (2016). Corporate governance, earnings quality and firm value: Evidence from Malaysia (Doctoral thesis, College of Business, Victoria University, 2016). [Google Scholar] [Crossref]

37. Shaki, D.L., Falack, V. Maurice, A. & Emmanuel, U. B. (2020). Board diversity on firms’ value of financial institutions. International journal of advanced academic research (social and management sciences), 6(9), 74-82. DOI: 10.46654/ij.24889849.s6918. Accessed, March, 2022. [Google Scholar] [Crossref]

38. Soyemi, K.A., Ogunleye, O.J. & Ashogbon (2014). Risk management practices and financial performance: Evidence from the Nigerian deposit money banks (DMBS). International journal of managerial studies and research (IJMSR), 2(5), 31-39. [Google Scholar] [Crossref]

39. Spring, R. (2005). Liquidity risk management. https://www.dico.com. Accessed April, 2021 [Google Scholar] [Crossref]

40. Tahu, G.P. & Susilo, D.D.B. (2017). Effect of liquidity, leverage and profitability to the firm value (dividend policy as moderating variable) in manufacturing company of Indonesia Stock Exchange. Research journal of finance and accounting, 8(18), 89-98. [Google Scholar] [Crossref]

41. Tassew, A.W. & Hailu, A.A. (2019). The effect of risk management on financial performance of commercial banks in Ethiopia: journal of financial studies, 1(1), 25-38. [Google Scholar] [Crossref]

42. Udenwa, A.T., Suberu, A. A. & Jacob, Z. (2023). Effect of liquidity risk on the financial performance of quoted deposit money banks in Nigeria. International Journal of Economics, Business and Management Research, 7(7), 54-69, URL: https://doi.org/10.51505/IJEBMR.2023.7705. Accessed, June, 2024. [Google Scholar] [Crossref]

43. Wisdom, M.O., Muideen, A. I., & Akindele J. O. (2018). Risk management and financial performance of deposit money banks in Nigeria. European journal of business, economics and accountancy, 6(2), 430-42. https://www.researchgate.net/publication/323992668. Accessed, June, 2021. [Google Scholar] [Crossref]

• Financial Technology (Fintech): Current Research at The Cutting Edge
• Reforming Corporate Governance in Malaysia to Address Fraudulent Financial Reporting Cases
• Stock Market Efficiency and Economic Diversification in Nigeria and South Africa
• Financial Stability and Financial Performance of Small and Medium Tiered Deposit Taking Savings and Credit Cooperatives in Kenya.
• Regulator Sandboxes for DeFi: A Comparative Analysis of Policy Effectiveness in the EU, US, and Asia Pacific