an appraisal on working capital in banking industry

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AN APPRAISAL ON
WORKING CAPITAL IN
BANKING INDUSTRY

BY

BRIDGET OMOTAYO EMMANUEL

ABSTRACT
This work is an appraisal on working capital in banking industry. A hundred and twenty questionnaires were distributed among people and managers from selected banks in Nigeria. Interviews and surveys were also conducted.  

Primary and secondary data were used in the analysis. Tables and percentages were used as the instrument of analysis.  
It was observed therefore that working capital have a significant impact on banking industry. Also, there is a strong relationship between working capital and banking industry.

TABLE OF CONTENT
PAGES
TITLE PAGE i
CERTIFICATION ii
DEDICATION iii
ACKNOWLEDGMENT iv
ABSTRACT v
1.0 CHAPTER ONE -: INTRODUCTION
1.1 BACKGROUND OF STUDY
1.2 STATEMENT OF PROBLEM
1.3 OBJECTIVE OF STUDY
1.4 RESEARCH QUESTIONS
1.5 HYPOTHESIS
1.6 SCOPE OF STUDY
1.7 SIGNIFICANCE OF STUDY
1.8 LIMITATION OF STUDY
1.9 DEFINITION OF TERMS
2.0 CHAPTER TWO -: LITERATURE REVIEW
2.1 INTRODUCTION
2.2 CONCEPT OF BANK CONSOLIDATION
2.3 EVOLUTION OF BANKING IN NIGERIA
2.4 ROLE OF BANKS IN THE NIGERIA ECONOMY
2.5 POSITION OF THE BANKING SECTOR BEFORE CONSOLIDATION

2.6 OBJECTIVE OF BANK CONSOLIDATION
2.7 BANK CONSOLIDATION THROUGH MERGER AND ACQUISITION
2.8 IMPACT OF CONSOLIDATION ON THE BANKING SECTOR
2.9 EFFECT OF BANK CONSOLIDATION ON THE NIGERIA ECONOMY
3.0 CHAPTER THREE -: RESEARCH METHODOLOGY
3.1 RESEARCH DESIGN
3.2 AREA OF STUDY
3.3 POPULATION OF STUDY
3.4 SOURCE OF DATA
3.5 SAMPLING METHOD
3.6 RESEARCH INSTRUMENTATION
3.7 VALIDITY AND RELIABILITY OF RESEARCH INSTRUMENT
3.8 METHOD OF INVESTIGATION
4.0 CHAPTER FOUR -: DATA ANALYSIS
4.1 PRESENTATION AND ANALYSIS
4.2 TEST OF HYPOTHESIS
5.0 CHAPTER FIVE -: SUMMARY OF FINDINGS / CONCLUSION
5.1 SUMMARY OF FINDING
5.2 CONCLUSION
RECOMMENDATION
REFERENCES

CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF STUDY
Nigeria banking sector has experienced a boom-and-burst cycle in the past 20-25 years. After the implementation of the structural adjustment programme (SAP) in 1986 and de-regulation of the financial sector, new banks proliferated mainly driven by attractive arbitrage opportunities in the foreign exchange market (Heiko 2007), but prior to the de-regulation period, financial intermediation never took off and even declined in the1980’s and 1990’s (Capirio and Kligbiel). The sector was highly oligopolistic with remarkable features of market concentration and leadership. Lemo noted that there are ten banks that control more than 50% of the aggregate assets of the banking sector, more than 51% of the aggregate deposits liabilities and more than 45%of the aggregate credits. The sector was characterized by small scale banks with high overheads; low capital base averaging less than $10 million; heavy reliance on the government patronage and loss making. Nigeria‘s banking sector was still characterized by a high degree of fragmentation and low level of financial intermediation up to 2004. This research work is motivated by the need to look into the Central bank (CBN)’s recent reform (consolidation) that employed certain measures to strengthen the Nigeria banking system by drastically increasing the minimum capital requirement from N2 million to N25 billion ($190 million-US). Through review of relevant literatures, analysis of policy documents, official report and economic information on the banking sector, it became evident that the consolidation of banks led to a remarkable reduction in the number of banks from 89 to 25 by merge, acquisition, initial public offer and other means. The research work concludes that bank consolidation has resulted in making banks more efficient and reliable and also, their intermediary potentials have also been revised. 1.2 STATEMENT OF PROBLEM

Business organizations are recently seeing consolidation (merge and acquisition) as an alternative means of re-capitalizing....
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