This study review the corporate finance services as obtained in
the Nigeria banking business. The major corporate finance discussed
ranges from the capital market services, under which management of
capital equity issue, marketing, packaging, advisory services were
discussed. Add to other corporate finance services such as loan
syndication, venture capital, merger and acquisition were discussed. The
global perspective was used to measure the extent of development of
such services and the performance of bank to determine its profitability
in Nigeria universal bank as a case study. At FBN plc the following
corporate finance services are seen to be in operation; project
financing, capital market services, advisory service. The rates of fees
chargeable were not analyzed since we could not get the transaction with
corporate customers. Also the possibility of enhancing income
generation and capital base transaction to the corporate customers.
Finally, it is clear that a lot still need to be done in areas of
innovation and regulatory requirement before banks carefully reap the
benefit of corporate finance services.
With the deregulation of the economy and the emergence of
several government regulations, the traditional role of Universal Bank
as providing short term finance has undergone an economic metamorphosis
resulting in the granting of license by Nigeria Stock Exchange to
universal bank to participate to a greater extent or length in the
And these enhance banks to go into various capital project financing
through their corporate finance unit thereby erecting more profit or
1.1 BACKGROUND TO THE PROBLEM
The deregulation and liberalization of the banking industry in 2004
has changed the industry landscape in many aspect, prominent among the
changes are: -
- Decrease in the number of banks
- Specialization in banking industry and
non-bank financial institution, discount house, finance house and micro
- Automation in banking industry, computerization and technology enhancement.
- Raising of minimum paid up capital to N25 billion for both universal and Merchant banks.
The highlighted changes among other gave N25 billion paid-up capital
for a degree completion resulting in innovation and product development
or service development. A number of banks had been forced to patronize
the capital market to source for fund in form of capital. Thus, the
current wave of development of new service product become a reaction by
bankers to the consciousness aroused with respect to the treatment to be
met out to customer as well as the need for sound improvement on their
liquidity position and capital base.
However, the new service products are directly aimed at mobilizing
deposit and revenue generated through fee based transactions which are
mostly directed to corporate customers. And with the target of providing
a corporate finance services to corporate body with capital project
through their corporate finance unit with the aim of generation more
profit or income.
1.2 STATEMENT OF THE PROBLEM
In the statement of this research work, corporate finance takes on
various investment services to institutional and private investors such
that these adequate services does not reduce some abnormality that may
hinder the much needed profit in their operation which can be deduced
from the understand:
i. That bank ensures the adequate collections of collateral before loan are given out.
ii. That bank does not operate within the aggregate
limit in their finance services in order to facilitate the achievement
of government social economic programme and profitability.
iii. And that bank does not ensure correction measure
or action to be taken if the borrower does not repay in accordance with
the agreement as arranged.
1.3 OBJECTIVE OF THE STUDY
The examination of corporate finance service on Universal banking in
Nigeria is pertinent at this time of little or no bank failure couple
with government concern for stable and self reliance economy through
high sustainable productive capacity, since such service provides
companies with the necessary finance is for dynamic base to meet future
However, the aim of the study is to identify the corporate finance
services offered by Nigeria Universal Banks as compared with banks in
1.4 STATEMENT OF RESEARCH HYPOTHESIS
According to Kertiger, F. H Dictionary “An hypothesis is a guessed statement of a relationship between two or more variables.
The above definition serves as a guide for the research test for hypothesis
Hi: That corporate finance management reduces the level of fraudulent practice in bank and boost profitability.
Ho: That corporate finance management does not
reduce the level of fraudulent practices in banks and hinders their
level of profitability.
Hi: There is significant correlation between
the corporate finance services in reducing the level of fraudulent act
and profit generation.
Ho: There is no significant correlation between
the corporate finance services in reducing the level of fraudulent act
and profit generation restriction.
1.5 JUSTIFICATION OF THE STUDY
The research work is conducted mainly on corporate finance service as
it relates to institutional leaders and its impact on banks
profitability with little emphasis on universal banking. And to be a
guide for academic excellent and to companies who are unaware of such
service facilities in banks.
1.6 SCOPE OF THE STUDY
The project covered corporate finance services in universal bank but
limited to those in existence presently at First Bank of Nigeria Plc.
1.7 LIMITATION OF THE STUDY
The study like many other studies has a share of limitation as in
every human undertaken there are always constraints in achieving the set
down goals in which this project is not left out. Some of these
constraints include the following: -
a. Time Factor: - It would be generally
agreed upon that carrying out research work involves a lot of time,
which is not on one’s side. The available time to carry out this project
is very short.
b. The problems of data collection and its accuracy: - It
is well known fact that bank staffs are always busy during and after
business hour with customers and balancing of each day account. So as a
result of this questionnaire set out were not returned on time even many
questions were not answer or retuned. The reason behind this might be
due to the amount of secrecy as professional ethic of the job.
c. The problems of finance to augement the effectiveness of the project.
d. Also, the book that were available in the
school library here are outdated, beside these is the lack of power
supply (electricity) in the school environment for more research online.
1.8 DEFINITION OF TERMS
Corporate Finance: - This is concerned with making
the provision and the use of a firm’s finance which involves the
allocation of scarce capital resources among competition opportunities
Corporate Finance Services: - This is the services
rendered to companies or business organization by provision them with
fund to run smoothly the business usually from a bank.
Profitability: - This is the ability of the
corporate finance operator to earn profit or gain to the extent that the
principal sum, interest and desire profit of an advance made is repaid.
Bank: - This is an institution or financial
intermediaries that offer various financial services to both individual
and corporate customers