Evaluating the Impact of Liquidity Risk Management on the Financial Performance of Commercial Banks: A Case Study of Rokel Commercial Bank (Sierra Leone)

This study was therefore carried out to evaluate the influence of liquidity risk management on commercial banks' financial performance, considering Sierra Leone. The research concentrates on Rokel Commercial Bank Sierra Leone Limited, from 2014 -2023. Secondary data have been collected for 10 years between 2014 and 2023. Descriptive statistical analysis and regression models were used to assess the relationship between liquidity risk management and commercial banks' financial performance. The regression model analysis of the bank shows a significantly positive relationship between liquidity risk management and commercial banks' financial performance in Rokel Commercial Bank Sierra Leone Limited. The studies found that liquidity risk management accounted for 36.7% of the difference in return on the asset over the study period. The Liquid Ratio, Asset Quality Ration loan-to-deposit ratio, and total liabilities-to-total assets account for a substantial increase, led by total revenues. Further findings from this study have been that the liquid assets-to-total assets hurt the commercial bank’s financial performance. It also indicates how banks must therefore ensure that they retain an optimum amount of liquid assets that usually provide lower returns while at the same time being able to satisfy customer requirements. This recommends that as the study developed an adverse relationship in the management of liquidity risks and financial returns of Sierra Leone commercial banks, this makes it more important to management not only to improve the practice of effective liquidity management by maximizing return on asset (ROA) but also to put banks on a sound foundation to withstand risks that might arise in financial matters.