TABLE
OF CONTENTS
Title Page Page
TITLE
PAGE
CERTIFICATION
DEDICATION
ACKNOWLEDGEMENT
ABSTRACT
TABLE
OF CONTENTS
CHAPTER ONE
1.0 Introduction
1.1 Historical Background
1.2 Purpose of Study
1.3 Significance of Study
1.4 Statement of Problem
1.5 Scope and Limitations of Study
1.6 Research Hypothesis
1.7 Research Methodology
CHAPTER TWO
2.0 Literature Review
2.1 The Role of Banking Industry
2.2 Historical Background
2.3 Review of Previous Work
2.4 Review of Related Literature
2.5 The Impact of the Research
CHAPTER THREE
3.0 Research Design
3.1 Study Population
3.2 Methods of Data Collection
3.3 Characteristics of Study Population
3.4 Research Instrument Specification
3.5 Method of Analysis
CHAPTER FOUR
4.0 Introduction
4.1 Data Analysis and Presentation
4.2 Test of Hypothesis
CHAPTER FIVE
5.0 Summary, Conclusion and Recommendation
5.1 Summary
5.2 Conclusion
5.3
Recommendations
BIBLIOGRAPHY
APPENDIXES
QUESTIONNAIRE
CHAPTER
ONE
INTRODUCTION
1.1
BACKGROUND OF THE STUDY
The
potential crisis that is looming in the Nigerian banking industry can no longer
wait to be addressed other than what could be witnessed in the revolutionary
instance taking by Prof. Charles Soludo, directives on the N25b capitalization base for banks who wish to operates in Nigeria
Economy.
In
addressing the financial institutions, he maintained that, the directive is
part of a series of reforms to get the banking sector in the modern proper
shape, to have banking system “where people can afford to put their money
and go to sleep”, where investors can rely on banking sector to provide
long term credit and to develop a banking sector that can respond to demands of
globalization for global competitiveness. Fundamentally, it is designed to
prevent potential systematic crisis that is looming in the banking sector where
you have 89 banks all of which put together happening to be less than one bank
in South Africa, where the most capitalized bank in Nigeria has less than 50
percent of the capital base on the least capitalized bank in Malaysia; where
indeed none of our bank is big enough to be able to transform the economy.
According
to Soludo( 2006), among the 89 banks we almost cannot count on your
fingertips, how many of them are really involved in the real act of
banking, he described most of the banks as traders who just collect banking
license, use connection to get public sector deposit, trade in government
treasury bills, trade in foreign exchange and open letters of credit in the
Nigeria economy. We have a weak banking system where nobody can put his money
and go to sleep and that is why confidence in the system is impaired.
Considering
banking sector as the life wire of economic growth and development of any
economy, what is obtained presently is a back drop, hence N25b capitalization
is needed to sanitize the industry particularly the entire economy of Nigeria.
According to DoyinOdunfa (2005) Said during
the unveiling of this year’s web-jurist rating for the financial services
sector that 25billion naira capitalization would create several opportunities
and hamess banks potentials and capitalization to drive e-banking in Nigeria.
1.2 STATEMENT OF RESEARCH PROBLEM
The
statement of problem in question here, formed to enhance a clear articulation.
This image is built up by information about the company while information is
also centred on dividend payout, earnings announcement and management
potentials. The questions awaiting instant answer are:
·
What are the effects of N25b capitalization on Nigeria financial
institutions.
·
What meaningful choice of option were
available (whether merger or acquisition) and its effect on employees and
ownership control.
·
What effect has this capitalization
depict on the consumers of the services rendered by the banking sector.
1.3
RESEARCH OBJETIVE
The
purpose of this study is to attempt to answer questions raised in the statement
of the problem of this research work. Such includes:
a. To
examine and assess the ability of the new regulation and to sanitize the banking
sector of the economy.
b. To
identify the various effects and measures of performance evaluation on
customers, employees and the bank as a whole.
c.
To carry out a detailed performance
evaluation of the selected case study.
d.
Recommending viable solutions to
these problems and prospects.
The
study is also expected to determine the effects and impact of N25b Capitalization on Banking Industry in
Nigeria. It will be of great help to the economic planners, academicians for
future review, mostly banking executives and top-management of banks and
statutory agencies governing and regulating the institutions.
1.4 RESEARCH QUESTION
The
importance of research question is to guide the researcher on the specific
methods and the procedures for acquiring information needed to structure or
solve the problem under consideration. The method of collecting data for this
research was through primary and secondary sources of data collection. The
primary sources were through questionnaires given to some of the staff of the
case study organizations and personnel interviewed while secondary sources were
through documented literature such as CBN annual report, NDIC annual report,
financial dailies, seminar papers, journals and textbooks.
1.5
RESEARCH HYPOTHESIS
This
study will seek the following answer for the question:
H0: The twenty five (25) Billion naira capitalization does not have effect in the banking industry in
Nigeria.
H1: The twenty five (25) Billion naira capitalization will have effect
in banking industry in Nigeria.
H0: The twenty five (25) Billion naira
capitalization will not have impact on loan syndication of Banks.
H1: The twenty five(25) Billion naira
capitalization will have impact on loan syndication of Banks.
H0: The twenty five (25) Billion naira capitalization will not help to
build customers confidence in the banks.
Hl: The twenty five (25) Billion naira capitalization will help to
build customers confidences in the banks.
H0: The twenty five (25) Billion naira capitalization will not improve
the services of the banks.
Hl: The twenty five (25) Billion naira capitalization will improve
the service of the banks.
1.6 SIGNIFICANCE
OF THE STUDY
The
significance of this study cannot be over-emphasized, owing to the fact that
the banking industry plays a significant role in the economy. Most studies have
dealt with profitability and social responsibility as the sole determinants of
the performance of the banking industry; few have included other variables like
leverage and managerial quality. It is commonly assumed that the Nigerian
investors are dividend conscious, therefore, when a company is not paying
dividend as at when due, there is tendency for investors to sell such equity.
Furthermore, the ability of companies to raise funds from the capital market
and the quantum of funds raised is a function of the image of the company in
the eyes of the investing public.
1.7
SCOPE AND LIMITATION OF THE STUDY
Undertaking
a project work of this nature is no doubt a herculean task that needs sufficient
time and patience, funds and adequate material, commitment and concentration.
However, some of these requisites and other factors combined to mitigate
against the success of this project. In this research work, we have examined
thoroughly the effects of N25b
Capitalization of Banking Industry on loan syndication while proffering some
recommendations.
The
major constraint envisaged would be that of laying hands on relevant data and
information on the banks and the dearth of adequate record of transactions and
their inability to make available their annual year report on time for
compilation to the apex bank and relevant authorities. Due to financial
constraints, limited time amongst others, the research is limited to three
banks, First Bank of Nigeria Plc., Guaranty Trust bank and Skye bank Plc. All
in Abuja branch. Comments, opinions from questionnaires and excerpt from
Central Bank of Nigeria (CBN) annual report, financial dailies, journals and
textbooks were also utilized.