Treasury Management and Banks Performance in Nigeria

Abstract

This study investigates the relationship between treasury management strategies and bank performance in Nigeria, focusing specifically on deposit money banks from 2015 to 2024. The study adopts a quantitative approach, using descriptive statistics. The Random Effect Model (REM) was employed to analyse the panel data. The empirical results indicate that treasury risk management has a negative and statistically significant effect on ROA, suggesting that higher treasury risk exposure may reduce asset returns. In contrast, both operational risk management and credit risk management have positive and statistically significant impacts on ROA, highlighting their effectiveness in improving financial performance when properly managed. Although bank size has a positive relationship with ROA, the result is statistically insignificant, implying that size alone does not directly influence performance. The interaction terms included in the extended model further underscore the conditional effects of bank size on the main explanatory variables. The study concluded that operational and credit risk management strategies significantly enhance bank performance, while treasury risk practices require improvement to avoid diminishing returns. The study recommends that Nigerian banks strengthen internal treasury controls, optimize operational risk frameworks, and adopt robust credit risk assessment tools. Regulatory bodies should also encourage a more risk-sensitive management culture that aligns with international best practices to promote sustainable bank performance.