A Study of the Impact of Financial Distress on Nigeria Commercial Banks

A Study of the Impact of Financial Distress on Nigeria Commercial Banks

Project / Seminar Material
Reference ID: PS-12385-TM

DEDICATION

This research material titled “A Study of the Impact of Financial Distress on Nigeria Commercial Banks” is dedicated to God for his enabling grace, and to all computer enthusiasts who contributed to make life a pleasant experience during my research documentation.

ACKNOWLEDGEMENT

I extend my sincere gratitude to all those who contributed to the completion of this project. Special thanks to my Supervisor (Name of your Supervisor), the Head of Department (Name of your HOD), the Lecturers in the department of Banking and Finance (BF), Book Authors and Profound Scholars of existing or related project material on “A Study of the Impact of Financial Distress on Nigeria Commercial Banks” for their invaluable guidance, support, and expertise throughout the journey.

I am also grateful to your study area (mention any funding organizations, if applicable) for their financial assistance. This research would not have been possible without the encouragement and assistance of some stakeholders (mention any mentors, teachers, or colleagues). Additionally, I would like to acknowledge the understanding and patience of my family and friends during this endeavor. Your unwavering support has been a constant source of motivation. Thank you all for being part of this meaningful endeavor.

TABLE OF CONTENTS

PRELIMINARY PAGES

CHAPTER ONE

INTRODUCTION

    CHAPTER TWO

    LITERATURE REVIEW

    • 2.1 Introduction
    • 2.2 Conceptual Review
    • 2.3 Theoretical Framework
    • ⋮
    • 2.4 Empirical Studies

    CHAPTER THREE

    RESEARCH METHODOLOGY

    • 3.1 Introduction
    • 3.2 Research Design
    • 3.3 Population of Study
    • 3.4 Sampling and Sampling Technique
    • 3.5 Validation of Research Instrument
    • 3.6 Method of Data Collection
    • 3.7 Method of Data Analysis
    • 3.8 Questionnaire Administration
    • 3.9 Ethical Consideration
    • 3.10 Statistical Analysis

    CHAPTER FOUR

    DATA ANALYSIS, RESULT AND DISCUSSION

    • 4.1 Introduction
    • 4.2 Presentation and Analysis of Data
    • 4.3 Re-statement of Research Questions
    • 4.4 Test of Hypotheses
    • 4.5 Discussion of Findings

    CHAPTER FIVE

    SUMMARY, CONCLUSION AND RECOMMENDATION

    • 5.1 Introduction
    • 5.2 Summary of Findings
    • 5.3 Conclusion
    • 5.4 Recommendation
    • 5.5 Suggestion for Further Study

    REFERENCES

    APPENDIX A - “QUESTIONNAIRE”

    ABSTRACT

    This research work examined the “A study of impact of financial distress on Commercial Bank of Nigeria. It investigated the causes and characteristic of bank distress in Nigeria economy. It is believed that these problems that hinder smooth banking in commercial banks will be evaluated to ensure safe and sound banking system.

    Many related literature were reviewed as the researchers collected data for this work in remote communities where banking. The effect of bank distress on the economy on the other hand included the erosion of public confidence mostly to the commercial banks.

    A Study of the Impact of Financial Distress on Nigeria Commercial Banks

    CHAPTER ONE

    Introduction

    1.1 Background Of Study

    A bank can be defined as an organisation whose principle operation is concerned with the accumulation of temporarily idle money of the general public from the purpose of advancing to others for expenditures.

    John Paget defined a bank as “A corporation or person(s) who accepts money on current account pays cheques on such account on demand and collects cheques for customers”

    Oxfords advanced learners dictionary defined a bank as an organisation or place that provides a financial service or a place where something is stored ready for use.

    The establishment of modern banking in Nigeria dates back to the colonial era when the African banking corporation was formed in 1892 to distribute currency notes of bank of England for the British Treasury subsequent developments were encouraged by colonial trade. In the bid to address the credit needs of indigenous enterprenurs, Nigerian later ventured into the banking business, initially through private individual initiatives and later through deliberate government policy.

    The problem of distress in the financial sector, including outright bank failure, has been observed in Nigeria as far back as 1930 when the First Bank failure was reported. Indeed, between 1930 and 1958 when the Central Bank of Nigeria was established, over 21 banks failure were recorded.

    However, the degree of intensity and scope of the distress has never been as serious as had been observed since June 1989 when the government directive to withdraw deposits of government and other public sector institutions from bank to the CBN exposed the weak financial condition of most financial institution and the severity a problem has progressively increased.

    The distressed condition has been traced to a wide range of causes, some of which are listed on literature review.

    Eventually, when distress come into the scene, tears of loosing fund to the banks influenced negatively, in the commercial bank.

    1.2 Statement Of Problems

    With the ware of distress spreading in the finance companies, community banks and primary mortgage institutions a total of 24 banks were distressed in 1993, as against to in 1992, 31 finance house were classified distressed while 118 were in default of matures obligation, 456 complaints against 156 finance companies for non resumption of mortared funds however, total assets on liabilities of 395 finance firms stood at N13.38 billion in 1993 as against N2.44 billion reported for the proceeding year (1992).

    The situation was attributed to the followings:

    1. Prevailing economic recession, policy induced stock poor and detonating assets quality arising from large portfolio of non-performing credit, non maintenance of assets and liability.
    2. Poor management bothering on sharp practice and lack of experience, which is the most serious problem, associated with bank distress in the commercial bank.
    3. Ineffective inefficient and poor performance of the financial sector on the role of promoting and supporting economic development in the commercial bank.

    The problem in focus above, triggered off the interest of the researchers to carry out study.

    …

    CHAPTER TWO

    2.0 Literature Review

    2.1 Introduction

    This chapter focuses on the review of related literature. A literature review includes the current knowledge as well as theoretical and methodological contributions to a particular topic. It documents the state of the art with respect to the topic you are writing. It surveys the literature in the topic selected. In this research work the literature review includes the …

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