ASSET-LIABILITY MANAGEMENT AND BANK SURVIVAL OF SELECTED DEPOSIT MONEY BANKS IN NIGERIA

561 International Journal of Social and Educational Innovation Vol. 12, Issue 23, 2025 ISSN (print): 2392 – 6252 eISSN (online): 2393 – 0373 DOI: 10.5281/zenodo.17257164 ASSET-LIABILITY MANAGEMENT AND BANK SURVIVAL OF SELECTED DEPOSIT MONEY BANKS IN NIGERIA Joseph Olorunfemi AKANDE Walter Sisulu University, South Africa Abstract Asset-liability management represents a critical benchmark that deposit money banks must systematically monitor and integrate into strategic financial and operational decision-making processes to ensure institutional sustainability. In light of this, the present study investigates the impact of asset-liability management on the survival of selected deposit money banks in Nigeria. Employing an ex-post facto research design, the study utilized secondary data derived from selected deposit money banks covering the period from 2010 to 2021. Panel regression analysis was applied to examine the relationship between asset-liability structure—measured by cash and cash equivalents, net loan portfolio, net fixed assets, total deposits, and total longterm funding—and bank survival, proxied by the capital adequacy ratio. The empirical findings indicate that the asset-liability structure, across the specified dimensions, exerts a statistically significant influence on bank survival among the sampled banks. Based on these results, the study concludes that the effective management of key asset and liability components—specifically, cash and cash equivalents, net loan portfolios, net fixed assets, total deposits, and long-term funding—is vital to enhancing the capital adequacy and, by extension, the long-term viability of deposit money banks in Nigeria. Consequently, it is recommended that top management of deposit money banks prioritize prudent management of cash and cash equivalents, ensuring a year-on-year increase in alignment with regulatory standards, to promote institutional resilience and sustainability. Keywords: asset-liability management, deposit money banks, sustainability, institutional resilience. International Journal of Social and Educational Innovation (IJSEIro) Volume 12/ Issue 23/ 2025 562 Introduction One of the main goals of deposit money banks all over the world has been to survive. The relationship between asset-liability structure and commercial banks, or deposit money survival, is still being studied, especially in the wake of the global financial crisis (GFC) of 2007–2009, bank consolidation, and recent reformation of the global banking system that caused a credit crisis in most countries. As a result, academics, professionals, and bank managers from developed, emerging, and developing economies are interested in achieving bank survival and sound capital adequacy to increase the role of bank intermediaries. Globally, capital mix contributes to the assets, liabilities, and financial survival of commercial banks, or deposit money banks play a major role in the primary objective and function of commercial bank financial earnings and intermediation between economic agents. One of the main objectives of Deposit Money Banks (DMBs) worldwide has long been financial gain. The connection between asset-liability management and bank profits is currently being studied, mainly in the wake of the global financial crisis (GFC) of 2007–2009, which resulted in bank mergers and national banking system reforms. Thus, to increase the role of the bank intermediary, bank managers and intellectuals around the world were worried about how to link asset-liability to achieve strong bank profitability. The asset-liability management and capital adequacy were part of prudential guidelines DMBs must screen and consider when making decisions (Ogbeifun et al., 2022). This is since bank profits as measured by returns (return on equity and return on assets) have a significant impact on bank operations. Without generally fulfilling the function of financial intermediaries and generating steady bank profits over time, DMBs cannot survive (Samryn et al., 2022). Therefore, the degree of capital mix, prudent asset-liability management, and bank profits through capital sufficiency must be seen as reliable indicators for DMBs to survive by academics and experts in the banking industry in developed, emerging, and developing nations. Due to difficulties in attaining sound shareholder wealth maximization, profitability, and market value, DMBs worldwide, including Nigeria, were unable to achieve their desired earnings. The issue of DMBs' low financial returns on investment was brought on by these difficulties. Asset-liability management mismatches continue to be a bigger problem for DMBs, which has a negative impact on banks' earnings and size (Yuan & Mi, 2022). Nigerian banks were not exempt; they faced issues with lost investments, illiquid assets, the inability to pay off shortand long-term debt, bank runs brought on by an imbalance between assets and obligations, and low financial profits. International Journal of Social and Educational Innovation (IJSEIro) Volume 12/ Issue 23/ 2025 563 The demise of commercial banks, also known as deposit money banks, or banks that do not survive, is a worldwide issue that can be linked to both established and emerging economies (World Bank Report, 2022). If deposit money regulators or commercial banks do not establish the death penalty for bank managers or criminals and establish robust, impartial monetary regulatory bodies that oversee and conduct appropriate assessments of deposit money bank assets and liabilities, the issue of bank failures will persist. Due to poor asset-liability management, which in turn impedes the deposit money banks' ability to function as sound financial intermediaries, Nguyen (2022) highlighted that most Nigerian deposit money banks will not be able to withstand long-term volatility in the global economy and monetary policies. Accordingly, there is a common issue with insufficient bank earnings, which leads to poor bank investment, a limited capital mix, and insolvency. According to Van Greuning et al. (2022), most Nigerian banks used innovative accounting strategies that allowed for the misreporting of assets and liabilities and threatened deposit money banks with asset-liability mismanagement. As a result, deposits money banks' earnings were hampered, and they were unable to reach their capital mix goals. Inadequate financial reporting and inefficient asset-liability management were the main causes of DMB failures in Nigeria (Ogbeifun et al., 2022; Onaolapo & Adegoke, 2020). While previous related studies have examined the relationship between asset-liability management, bank-specific factors, and bank performance (Abebe, 2022; Dao, 2020; Driss, & Mohammed, 2017; Kasasbeh, 2021; Lysiak et al., 2022; Mugun, 2019; Nguyen, 2020; Ogbeifun, & Akinola, 2020; Onaolapo & Adegoke, 2020; Owusu & Alhassan, 2020; Samryn & Ismail, 2022; Sifrain, 2022; Yuan, & Mi, 2022). However, most of these previous studies never examined the relationship between bank capital mix, asset-liability management, and capital adequacy among selected deposit money banks in Nigeria. Thus, there exists gap identified among past literature. Considered problem and gap identified, this study focused on interaction effect of bank capital mix between Assets-Liabilities management and bank strategy of selected deposit money banks in Nigeria. Literature Review The survival-based theory was first introduced in the realm of economics and has since spread to the social and management sciences. Survival base theory was first propounded by Schumpeter (1934). It is not surprising that the most common application of survival of the fittest theory found in business economics is to evaluate how corporations grow, manipulate, International Journal of Social and Educational Innovation (IJSEIro) Volume 12/ Issue 23/ 2025 564 and compete in industries, as well as to explain changes in the economy (Nelson & Winter, 1982). Harrod (1939) and Alchian (1950) were among the researchers who also incorporate survival base theory in economics and business survival analysis. Herbert-Spencer developed the survival-based hypothesis, also known as survival of the fittest theory (Miesing & Preble, 1985). According to the survival foundation hypothesis, it is typical for competitors to act hedonistically and manipulate their methods to create the best company, which endured and thrived by effectively adjusting to its surroundings and faking facts to endure for a considerable amount of time. Therefore, under this view, intense commercial competition and unscrupulous politics, like creative accounting or figure manipulation, are acceptable. Despite the popularity of the survival-based view in strategic management, researchers like Abdullah (2010), Cragg (2002), Raduan, Jegak, Haslinda, and Alimin (2009) have criticized it for a number of reasons, arguing that organizations that use it are not viable because they lag behind market improvements rather than being leaders in both pricing and innovation (Abdullah, 2010; Cragg, 2002). The survival-based view emphasizes the assumptions that an organization must deploy strategies that are focused on running very efficient operations and can respond quickly to changing competitive environments (Khairuddin, 2005). According to analysts, proponents of this school of thought have very little room for growth, and if they do, their chances of outperforming businesses that want to influence market leaders are low (Raduan et al, 2009). The survival-based theory investigates the tactics businesses employ to keep from being wiped out by rivals (Miesing & Preble, 1985). The survival-based theory states that to succeed in innovativeness, high intuition, and the practical ability to manage an association, a business director must forge a road toward identifying, instinct, feeling, and thinking. They should also be ready to admit weaknesses to make improvements. Companies must continually respond to their intense environmental competition to thrive. It seems that a fresh perspective on the business environment (a paradigm and improved methods of behavior (corporate practices)) emerges every ten years (Brian, 1996). The foundation of the survival-based perspective of management is the belief that to survive, companies need to implement strategies that are centered on carrying out highly skilled jobs and can quickly adjust to the changing demands of a combative competitive environment (Khairuddin, 2005). Because the strongest and most equipped to adjust to their environment are the ones who survive. Advocates of this perspective, however, thought that choosing a particular technical layout would be ineffective. Instead, it is International Journal of Social and Educational Innovation (IJSEIro) Volume 12/ Issue 23/ 2025 565 advised to investigate a variety of options for a few procedures right away and then let the best system that adapts to the environment determine which procedure is ideal (Lynch, 2000). An organization that can successfully adapt to its surroundings and become the most skilled and prudent in both production and activity will survive. This can be achieved by communicating approaches that focus on having competent tasks and the ability to respond rapidly to changes in the competitive environment. The idea pursues nature's criterion that only the best and fittest in the environment will survive. The company must adapt to the changes to have a chance of survival, which will make the company aggressive in the marketplace (Khairuddin, 2005). According to Abdullah (2010), this hypothesis is also used to explain bank financial manipulation and deposit money banks that plan to change course after a period of subpar performance. These institutions have numerous obstacles in their existence, some of which may be caused by deceptive accounting practices or financial manipulation. Such organizations would use creative accounting techniques to help the organizations (banks) strengthen their survival to address the issue of survival. This is in the belief that it will improve the overall performance and survival of their banking operation, enabling them to meet their survival objective. Asset-Liability Management (ALM), according to Abebe (2022), is the process by which a bank processes and analyzes its assets and liabilities in conjunction with international banking standards. ALM focuses on how a bank's shortand long-term liabilities are implemented with its financial and non-financial assets. Additionally, ALM is an active strategy that includes assets-liabilities concurrently guidance to guide against bank risks, according to Owusu and Alhassan (2020). Accordingly, this study theoretically saw ALM as a method of breaking down banks' assets and liabilities to support a healthy role for financial intermediaries. Asset-Liability Structure (ALS) is defined by Van Greuning and Bratanovic (2022) as the process by which a bank's total assets and liabilities are controlled and structured simultaneously in an integrated fashion. ALS includes strategic planning and implementation as well as control processes that impact the volume, mix, maturity, interest rate sensitivity, quality, and liquidity of the bank's assets and liabilities. ALS addresses the protection of both income and capital from interest rate risk, which arises from mismatches in the repricing of assets and liabilities, while interest rate risk management seeks to keep interest rate risk exposures within permitted limits. Assetliability management protects capital and income from interest rate risk, which stems from mismatches in the repricing of assets and liabilities, while interest rate risk management tries to keep interest rate risk exposures within authorized levels. The CFI team (2022) states that International Journal of Social and Educational Innovation (IJSEIro) Volume 12/ Issue 23/ 2025 566 asset and liability structure (ALS) is a practice used by financial institutions to mitigate financial risks resulting from a mismatch of assets and liabilities. ALS strategies, which combine risk management and financial planning, are frequently used by organizations to manage long-term risks that can arise due to changing circumstances. Though the long-term goal of ALS in a commercial bank is to maximize the economic value of the bank, or the present value of the bank's expected net cash flows, which is calculated by subtracting the expected cash flows on liabilities from the expected cash flows on assets and adding the expected net cash flows on off balance sheet (OBS) positions, the short-term goal of ALS is to maintain liquidity while protecting earnings (Basel Committee on Banking Supervision, 2006). The asset-liability management methods employed by commercial banks and non-profit microfinance institutions are similar in practice, according to Brom (2009), referenced in Lysiak et al. (2022). According to Brandao-Marques, Ricardo, and Horacio (2020), asset and liability management is a method used by banks and other financial service providers to manage interest rates and liquidity risks. Cash and cash equivalents are the line items on the balance sheet that show how much money a company has in cash or that can be turned into cash right now. Bank accounts and marketable securities like commercial paper and short-term government bonds are examples of cash equivalents. Cash and cash equivalents, according to Wall Street Prep (2022), are a balance sheet category that includes cash and current assets with high liquidity (i.e., assets convertible into cash within 90 days). According to U.S. GAAP, cash equivalents are highly liquid, shortterm investments that can be easily converted into known amounts of cash and are so close to maturity that there is little chance of their value fluctuating due to changes in interest rates. Lawinsider (2022) defines cash and cash equivalents as the total amount of cash (whether in cash or credited to an account with a banking, financial, acceptance credit, lending, or other similar institution or organization) and cash equivalents of the company group related to the business, including all interest accrued thereon and the purchase price for the slump sale of the stipel undertaking as specified under the stipel business transfer agreement, excluding (i) cash equivalents under lock-in period or cash held in lien, as of a specific date and relating to the company group for the business; and (ii) the investor subscription amount. Additionally, Odo and Udodi (2022) shed light on the concept's applications when they pointed out that cash equivalents are maintained more for short-term cash obligations than for investments or other uses. An investment must be easily convertible into a known amount of cash and have a negligible risk of value fluctuations to be considered a cash equivalent. International Journal of Social and Educational Innovation (IJSEIro) Volume 12/ Issue 23/ 2025 567 Consequently, an investment typically only meets the criteria for being considered cash equivalent if it has a short maturity, such as three months or less from the date of acquisition. Investments in shares are not considered cash equivalents unless they are technically cash equivalents, such as preference shares of a business purchased just before their designated redemption date (if the company's failure to repay the amount at maturity poses a negligible risk). Since cash and cash equivalents are components of an organization's cash management rather than its operating, investing, and financing operations, cash flows do not include movements between these categories. Investing surplus funds in cash equivalents is a component of cash management (Odo & Udodi, 2022). The gross loan portfolio is the total amount of loans made to consumers on a given date, and the net loan portfolio is the difference between the gross loan portfolio and the amount of loan loss provisions (LLP), which are created by the bank in the event that borrowers fail to fulfill their obligations to repay the debt (Cbonds.com, 2022). These figures are shown in the financial statements of banks. In 2022, Wall Street Prep offered a mathematical method for defining Gross Loan Portfolio Less Loan Loss Reserve. The total amount owed on all outstanding client loans, including those that are current, past due, or restructured but not those that have been written off. Interest receivable is excluded from this. Loans from employees are not included. A net loan portfolio, according to Ndambiri, Munene, and Wajohi (2017), is the sum of all loans that a bank or finance firm has on hand at any given time. The degree to which financial institutions meet their lending goals, which supports the overarching organizational objective of maximizing shareholder wealth, is shown by the net loan portfolio performance (Cooper, Edgett, & Kleinschmidt, 2006). According to Fujo and Ali (2016), loan portfolio performance is critical to the success of all lending businesses, not just SACCOs. One measure that assesses the net worth of a business's fixed assets is net fixed assets. The purchase price of all fixed assets plus any further enhancements are added up to determine it. After that, deduct the amount that has accrued depreciation (Carbon Collective, 2021). Those who wish to determine the market worth of a company's fixed assets will find this measure very helpful. particularly if they want to purchase them. They can calculate how much they would have to invest in the company's fixed assets if they controlled them by knowing the net fixed assets. Gocardless (2022) states that net fixed assets are calculated by deducting the entire amount of depreciation from the purchase price of all a company's fixed assets. Total fixed assets minus (accumulated depreciation + liability) equals net fixed assets. A company's net fixed assets are calculated by subtracting the cumulative depreciation in the value of its total, International Journal of Social and Educational Innovation (IJSEIro) Volume 12/ Issue 23/ 2025 568 or gross, fixed assets. One word that appears on a bank's balance sheet is total deposits. For the average individual, the term "deposit" usually refers to putting money in a bank's safekeeping. Different types of deposits are considered while determining the total deposits from a bank's point of view. Total Deposits refers to the total amount of deposits as of the closing date's business close, including interest that has accumulated and remain unpaid as of that date. Therefore, financial institutions may not be able to meet their business goals and improve economic growth if there are insufficient bank deposits (Viswanadham, Yirgalem & Medanit, 2013). A bank's capital mix is a combination of its funding sources and is one of its first crucial decisions due to its association with risk and reward (Hu, 2022). The combination of the bank's debt and equity is what guarantees the bank's financial stability, profitability, growth, and expansion (Lysiak et al., 2022). The following are some possible types of debt-equity mix: Capital structure that is zero-geared or zero-leveraged (100% equity: 0% debt) Capital Structure with High Gearing or High Leverage (0% equity: 100% debt) Low Leveraged or Low Geared Capital Structure (X% Debt: Y% Equity). Out of these three options, the unlevered bank option is the one where the bank avoids the benefit of leverage, if any. The second scenario involves a bank with no equity capital. In a real-world economic scenario, this alternative might not be feasible or realistic because no fund provider will put his money into a bank without equity capital. The phrase "trading on equity" is partially explained by this; that is, the equity component of the bank's capital structure is what motivates the debt suppliers to donate their limited resources to the bank. Option three is the most practical since it utilizes the benefits of leverage, if any, by combining a specific percentage of debt and equity in the capital structure (Lysiak et al., 2022). Hu (2022) asserted that a company's capital mix is an amalgam of the funding sources it uses. The way a bank finances its assets through debt, equity, and securities is known as its capital structure, according to Otekunrin, Nwanji, Eluyela, Olowookere, and Fagboro (2020). It is the ratio of debt to equity that a business needs to finance its assets. According to Dao (2020), a bank's capital mix is the combination of debt and equity it uses to finance its investments and assets. Getting a reduced cost of capital and increasing shareholder wealth are two of the most significant company financial decisions made by financial management. According to Sifrain (2022), bank survival is the management's capacity to use the bank's assets to produce revenue, which leads to bank growth. According to Mugun (2019), bank survival is the growth of deposit money banks' overall assets. He added that bank growth measurement is International Journal of Social and Educational Innovation (IJSEIro) Volume 12/ Issue 23/ 2025 569 important for all stakeholders and that bank growth produced by management in running the bank is usually used to assess bank survival. The ability of a bank to survive depends on its deposit growth, which is the change in the commercial bank's deposits from year to year. According to Hotmaida, Fitrawaty, and Nugrahadi (2018), bank survival is a possible avenue for expansion for a banking company. Total asset growth is used to measure bank growth, with historical asset growth serving as a proxy for future bank profitability. Over time, a bank's total assets may rise or fall. The percentage change in assets from one year to the next is used to calculate asset growth. According to Omonruyi and Osamwonyi (2013), a strong, robust, and stable banking sector is critical to supporting economic activity, encouraging economic growth, and ensuring financial stability. They continued by saying that one of the most controversial issues in financial economies has been the connection between banks and economic growth. A robust financial system is acknowledged by all modern economies as a prerequisite for swift expansion and advancement (Sanusi, 2012). Tridico (2007) asserts that low bank lending rates promote economic growth as a complex matter requiring the advantageous interplay of multiple institutional and socioeconomic elements. According to Otekunrin, Fagboro, Nwanji, Asamu, Ajiboye, and Falaye (2019), the majority of Nigerian money deposit banks have the problem of focusing more on profit maximization than taking liquidity measures to meet the demands of their customers and fulfilling their obligations to their clients as and when due, and in the process, they are losing a significant portion of their clientele. This problem is thought to be resolved if the banks take their liquidity management as necessary as the way they focus on profitability so that they can benefit from the impact of a well-managed liquidity on profit maximization, the scholars enthused. Among the advantages of bank survival and expansion, according to Mugun (2019), are the following: banks generate money through a system known as credit creation, which enables them to lend far more than the deposits they hold; when banks lend this money to industries, small businesses, service providers, and agriculture, they are genuinely contributing to the exponential growth of the economy. Consequently, spending power and employment are created. One of the limitations, according to Driss et al. (2017), is that the bank will fail if everyone takes their money out at once during emergency situations. Banks never have enough cash on hand to pay all their clients because of the role that credit creation plays. The capital to risk (weighted) assets ratio (CRAR), sometimes referred to as the capital adequacy ratio (CAR), is the ratio of a bank's capital to its risk. National authorities monitor a bank's CAR to make sure it meets statutory capital levels and can withstand a fair amount of International Journal of Social and Educational Innovation (IJSEIro) Volume 12/ Issue 23/ 2025 576 Fakunmoju et al. (2023) model. The study added capital mix as interaction variable to achieve hypothesis two and justify whether bank capital mix may enhance bank financial survival proximity with capital adequacy ratio. The Fakunmoju et al. (2022) adopted model was stated below in equation one. The adopted model is stated as: BS = f (CCE, NLP, NFA, TD, TLF) (1) BSit = β0 + β1CCEit + β2NLPit + β3NFAit + β4TDit + β5TLFit +µi +εit (2) Where: CCE = Cash and Cash Equivalent, NLP = Net Loan Portfolio, NFA = Net Fixed Assets, TD = Total Deposit, Total TLF = Long-Term Funding and CM = Bank Capital Mix The study adapted Fakunmoju et al. (2022) model to achieve hypothesis one of the studies; as bank capital adequacy can also serve as one of the proxied for bank survival used as dependent variable in Fakunmoju et al. (2022) model. Thus, bank capital adequacy served as the dependent variable in the model for hypothesis one which will be stated below in equation three. CAit = β0 + β1CCEit + β2NLPit + β3NFAit + β4TDit + β5TLFit +µi +εit (3) Furthermore, bank capital mix will be added in equation three to establish interaction effect of capital mix with asset-liability management on bank capital adequacy (CA) and achieve hypothesis two. Therefore, the adapted model for hypothesis two will be depicted in equation four below. CAit = β0 + β1CCE*CMit + β2NLP*CMit + β3NFA*CMit + β4TD*CMit+ β5TLF*CMit +µi +εit(4) Results and Discussion The descriptive statistics in this study explain the least the average and the highest values of the series in the distribution; as well as the level of variations in the series which is determined using the standard deviation. Table 4: Descriptive Statistics Average Standard Error Minimum Maximum CAR 16.26 5.85 -10.19 30.37 Debt to Equity ratio (D/E) 50.43 7.95 12.84 242.90 International Journal of Social and Educational Innovation (IJSEIro) Volume 12/ Issue 23/ 2025 577 CCE 4.26 1.31 3.51 8.21 NLP 28.25 5.38 14.22 164.28 NFA 12.29 2.79 4.29 20.16 TD 10.14 24.91 1.91 25.36 TLF 15.84 9.93 22.58 59.14 Source: Researchers’ Computation (2025) Capital Adequacy Ratio (CAR) had a minimum and maximum values of -10.19 and 30.37 indicating that selected banks experienced loss of profit with higher CAR of 30.37. Debt to Equity (DE) represents the total at the average recorded 50.43 with minimum value of 12.84 and 242.90 and this depicted those selected banks having more total assets with largest D/E in the industry. CCE and NLP of the selected banks had average cash of 4.26 and 28.25 worth of loan portfolio with lower value of 3.51 and 8.21 for CCE and higher value of 14.22 and 164.28. NFA and TD recorded average of 12.29 and 10.14 with minimum and maximum value of 4.29, 1.91, 20.16 and 25.36 indicated that the selected banks assets and deposit yield positive transaction and lastly Total Long-term funding (TLF) showed that selected banks recorded average of 15.84 with maximum of 59.14 more than the double of average recorded by TLF, thus indicating sound investment of the selected bank long term funds to intermediary’s role by the banks in Nigeria. Table 5: Correlation Matrix Selected Deposit Money Banks CAR CCE NLP NFA TD TLF D/E VIF 1/VIF CAR 1 1.23 0.69 CCE -0.03 1 2.32 0.51 NLP -0.35 -0.05 1 1.10 0.57 NFA 0.21 -0.09 -0.23 1 1.36 0.63 TD 0.16 -0.08 -0.34 -0.01 1 1.29 0.42 TLF -0.19 -0.27 -0.21 -0.7 -0.08 1 1.11 0.10 D/E 0.53 0.34 0.29 0.24 0.63 0.21 1 2.01 0.23 Source: Researchers’ Computation (2025) International Journal of Social and Educational Innovation (IJSEIro) Volume 12/ Issue 23/ 2025 578 Table 5 depicted correlation matrix of positive and negative connection among study variables such as CAR, D/E, CCE, NLP, NFA, TD and TLF. As none of the variables were up to 0.8, thus there exist no multicollinearity problem among study variables (Gujarati, 2004). Also, Variance Inflation Factor (VIF) and Tolerance depicted that there exists no multicollinearity problem among study variables. Table 6: Regression and Post-Estimation Results for Hypothesis One Model for Hypothesis One Fixed Effect Panel Regression System Generalised Moment Method (SGMM) Coeff Std. Err TStat Prob Coeff Std. Err T-Stat Prob Variable Constant 3.062 5.325 0.554 0.311 6.185 5.391 1.08 0.251 CCE 0.389 0.042 0.881 0.353 0.384 0.119 2.05 0.032 NLP - 0.078 0.349 - 2.720 0.002 -1.418 0.418 -5.16 0.001 NFA 0.367 0.234 4.172 0.029 0.193 0.129 4.95 0.045 TD 0.164 0.053 3.782 0.002 1.124 0.031 7.97 0.001 TLF 1.196 0.147 3.545 0.001 2.521 6.328 8.33 0.015 Adj.R2 0.429 F-Stat F(5, 186) = 21.07 (0.00) Overall = 192 Instruments = 38.000 Hausman Test Chi2(5) = 26.71 (0.00) Overall = 190.00 Testparm Test (LM Test) F-stat = 5.17 (0.57) Arellano-Bond: AR(2) = 0.517 Heteroskedasticity Test Chi2(1) = 25.27 (0.60) Hansen test (p-value) = 0.153 Serial Correlation Test F-stat = 0.454 (0.53) Dependent Variable: Capital Adequacy Ratio (CAR) @5% Level of Significance Source: Researchers’ Compilation (2025) Due to Hausman and LM tests results for the panel model from Table 3 above, fixed effect panel regression and GMM were employed to estimate the study panel model, the probability values revealed that: Cash and Cash Equivalent (CCE) had positive and insignificant effect on bank capital adequacy (β = 0.389, t-stat = 0.881, p>0.05); Net Fixed Assets (NFA) (β = 0.367, International Journal of Social and Educational Innovation (IJSEIro) Volume 12/ Issue 23/ 2025 579 t-stat =4.172, p<0.05); Total Deposit (β = 0.164, t-stat = 3.782, p<0.05); and Total Long-Term Funding (TLF) (β = 1.196, t-stat =3.545, p<0.05) all had positive and significant effect on bank capital adequacy while Net Loan Portfolio (NLP) (β = -0.078, t-stat = -2.720, p<0.05) had negative and significant effect on bank capital adequacy in Nigeria. This indicated that as Cash and Cash Equivalent, Net Fixed Assets, Total Deposit and Total Long-Term Funding increase, there will be an increase in bank capital adequacy while increased in Net Loan Portfolio caused drop in bank capital adequacy of the selected banks. The Adjusted R2 depicted 0.429 (42.9%), which indicated that asset-liability management components or proxies explained 42.9% changes in bank capital adequacy of the selected banks. In a multiple regression model, R-square may not be preferable but Adj.R2 well explained the explanatory variables variance in the dependent variable. Likewise, the SGMM further established the robustness effect among study variables. The SGMM established that Cash and Cash Equivalent (CCE) (β = 0.119, t-stat =2.05, p<0.05), Net Fixed Assets (NFA) (β = 0.193, t-stat =4.95, p<0.05), Total Deposit (β = 1.124, t-stat = 7.97, p<0.05) and Total Long-Term Funding (TLF) (β = 2.521, t-stat =8.33, p<0.05) all had positive and significant effect on bank CAR except Net Loan Portfolio (NLP) (β = -1.418, t-stat = - 5.16, p<0.05) with bank capital adequacy. Thus, the study rejected null hypothesis one; H01: Asset-liability management components have no significant influence on bank capital adequacy in Nigeria. The study further analyzed hypothesis two which shown from the panel fixed effect result that interaction effect of bank capital mix with components of asst-lability management had significant yield effect on bank capital adequacy of selected banks; as interaction effect of CCE*D/E, NFA*D/E, TD*D/E and TLF*D/E had positive and significant influence on bank capital adequacy while NLP*D/E had negative and significant effect on bank capital adequacy selected in Nigeria. This insinuates that bank (D/E or capital mix) had great and significant interaction to bank capital adequacy of selected DMBs in Nigeria since the p<0.05 and that those selected deposit money banks had sound capital mix and asses-liabilities structure that significantly boost their CAR. Furthermore, from Table 7 it was depicted that Adj.R2 = 72.9% which signified that D/E as interaction factor of asset-liability management components (CCE, NLP, NFA, TD and TLF) widely explained CAR of selected DMBs. The differences in Adj.R2 before and after multiplication of bank capital mix (D/E) as interaction factors indicated that truly D/E of selected bank significantly contributes to their CAR. The F-stat = 103.46 (p< 0.05) indicated International Journal of Social and Educational Innovation (IJSEIro) Volume 12/ Issue 23/ 2025 580 that the study model was well fitted and that explanatory variables collectively and significantly contribute to changes in explained variables. Similarly, the SGMM also revealed that bank capital mix (D/E) as interaction factor (CCE*D/E, NFA*D/E, TD*D/E and TLF*D/E) had positive and significant influence on bank CAR while NLP*D/E had negative and significant effect on bank CAR of selected in Nigeria. This implies that SGMM supported the finding of fixed effect panel regression, thus the study rejected null hypothesis two that; H02: D/E (Capital Mix) does not significantly interact between asset-liability management components and CAR of selected DMBs in Nigeria Table 7: Regression and Post-Estimation Results for Hypothesis Two Model for Hypothesis Two Fixed Effect Panel Regression System Generalized Moment Method (SGMM) Coeff Std. Err TStat Prob Coeff Std. Err T-Stat Prob Variable Constant 1.732 1.195 1.014 0.221 6.295 5.822 1.08 0.284 CCE*D/E 1.299 0.289 6.902 0.031 1.014 0.834 7.25 0.001 NLP*D/E - 1.430 0.109 - 4.310 0.015 -0.387 0.213 -10.01 0.000 NFA*D/E 1.987 0.894 9.721 0.007 0.632 0.113 10.23 0.005 TD*D/E 0.946 0.053 5.122 0.018 1.166 0.042 7.97 0.001 TLF*D/E 1.030 0.979 8.285 0.000 2.433 7.438 8.33 0.015 Adj.R2 0.729 F-Stat F (5, 186) = 103.46 (0.00) Overall = 192 Instruments = 42.000 Hausman Test Chi2(5) = 59.36 (0.00) Overall = 190.00 Testparm Test F-stat = 13.58 (0.89) Arellano-Bond: AR (2) = 0.930 (LM Test) Heteroskedasticity Test Chi2(1) = 41.89 (0.90) Hansen test (p-value) = 0.271 Serial F-stat = 0.831 (0.69) Correlation Test Dependent Variable: Bank Capital Adequacy Ratio (CAR) @5% Level of Significance Source: Researchers’ Computation (2025) International Journal of Social and Educational Innovation (IJSEIro) Volume 12/ Issue 23/ 2025 581 Past related studies (Lysiak et al., 2022; Kasasbeh, 2021; Mugun, 2019; Nguyen, 2020; Ogbeifun, & Akinola, 2020; Onaolapo & Adegoke, 2020; Owusu, & Alhassan, 2020; Samryn, & Ismail, 2022; Sifrain, 2022; Yuan, & Mi, 2022) supported findings for hypothesis one of this study that asset-liability management affect bank survival. Also, finding revealed that bank capital mix (D/E) significantly interacts with both asset-liability components and bank CAR and for hypothesis two there was close to non-existence discussed related past studies (Abebe, 2022; Driss & Mohammed, 2017; Fakunmoju et al., 2022; Lysiak et al., 2022; Mugun, 2019; Ogbeifun, & Akinola, 2020; Onaolapo & Adegoke, 2020; Owusu & Alhassan, 2020 among others) that formulated hypothesis two raised in this study which served as gap identified among past studies. Thus, null hypothesis two was rejected. Conclusion and Recommendations The study examined the relationship between the interaction effect of bank capital mix (D/E) and asset-liability management components or proxies on bank CAR among Nigerian deposit money institutions. Bank capital mix (D/E) strongly interacts with asset-liability management components and bank CAR of selected banks in Nigeria, and asset-liability management components (CCE, NLP, NFA, TD, and TLF) considerably affect bank CAR, according to the study's findings. Based on this conclusion, this study recommended that. (i) The top management of the selected bank should carefully handle CCE, NLP, NFA, TD, and TLF in accordance with international banking standards without going against the Central Bank of Nigeria's established statutory requirements to generate long-term profits. (ii) Bank CAR in Nigeria will improve if the Central Bank of Nigeria (CBN) imposes appropriate sanctions for the unethical net loan portfolio of various assets in the banks that did not adhere to CBN regulatory regulation related asset or loan portfolio. 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