Merger and Procurement as a Financial Decision to Bank Efficiency in the Nigerian Economy A Case Study of Three Selected Banks in Owerri Imo State

Merger and Procurement as a Financial Decision to Bank Efficiency in the Nigerian Economy

Project / Seminar Material
Reference ID: PS-8539-TM

DEDICATION

This research material titled “Merger and Procurement as a Financial Decision to Bank Efficiency in the Nigerian Economy” 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 Accountancy / Accounting, Book Authors and Profound Scholars of existing or related project material on “Merger and Procurement as a Financial Decision to Bank Efficiency in the Nigerian Economy” 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.

Merger and Procurement as a Financial Decision to Bank Efficiency in the Nigerian Economy (A Case Study of Three Selected Banks in Owerri Imo State)

TABLE OF CONTENTS

PRELIMINARY PAGES

CHAPTER ONE

    1.0 Introduction

  • 1.1 Background of the Study
  • 1.2 Statement of the Problem
  • 1.3 Objectives of the Study
  • 1.4 Research Question
  • 1.5 Significance of the Study
  • 1.6 Scope of the Study
  • 1.7 Definition of Terms

CHAPTER TWO

    2.0 Literature Review

  • 2.1 Introduction

CHAPTER THREE

    3.0 Research Design and Methodology

  • 3.1 Introduction
  • 3.2 Research Design
  • 3.3 Sources/Method of Data Collection
  • 3.4 Population and Sample Size
  • 3.5 Sampling Techniques
  • 3.6 Validity and Reliability of Measuring Instrument
  • 3.7 Method of Data Analysis

CHAPTER FOUR

    4.0 Presentation and Analysis of Data

  • 4.1 Introduction
  • 4.2 Presentation of Data
  • 4.3 Analysis of Data
  • 4.4 Interpretation of Result
  • QUESTIONNAIRE

CHAPTER FIVE

    5.0 Summary, Conclusion, Recommendation

  • 5.2 Summary of the Finding
  • 5.3 Conclusion
  • 5.4 Recommendation

REFERENCES

APPENDIX

ABSTRACT

The study was conducted to examine the impact of Merger and Procurement as a Financial Decision to Bank Efficiency in the Nigerian Economy. Investigation revealed that every private and public enterprise in Nigeria have their accounting departments and there are increasing cases of financial mismanagement in usually all the public and private organization in Nigeria.

Through financial intermediation, banks can facilitate capital formation and promote economic growth by operating in a save and sound manner. This means that bans are expected to ensure precedent management of assets and guarantee the safely of customer deposits/funds.

The research design used in this report is descriptive design, utilizing questionnaire method to obtain information from the respondents for this project. A total of 50 (fifty) respondents were selected for this study to represent the entire population of the study. For null hypotheses were formulated and tested using the one-way ANOVA and the t-test statistical tools at zero point zero five (0.05) level of significance.

Primary data were collected from the primary source which questionnaire was used as an instrument of data collection while secondary data were sources from textbooks, journals, newspapers and the internet were employed. The data were presented on a frequency distribution table and analyzed using simple percentage, while hypothesis was tested using chi-square test.

For the conduction of this research, the researcher reviewed other related literatures necessary to prove data for the study from the related literature it was observed that consolidation and acquisition are used to maintain adequate and appropriate internal controls measure to prevent incidence of fraud, forgeries and other financial/ malpractice to ensure stability and engender public confidence in the financial system.

Merger and Procurement as a Financial Decision to Bank Efficiency in the Nigerian Economy (A Case Study of Three Selected Banks in Owerri Imo State)

CHAPTER ONE

1.0 Introduction

The term “merger” refers to the integration of two companies where one new company will continue to exist. The term “acquisition” refers to the acquisition of assets by one company from another company. In an acquisition, both companies may continue to exist. The Nigerian banking industry has witnessed a dramatic transformation since the December 31st, 2005 deadline for bank recapitalization. Overall, the banking sector has experienced steady consolidation through recapitalization, mergers and acquisitions that have resulted in fewer banks holding a greater value of the total assets in the sector (Okpanachi, 2011). The waves of mergers and acquisitions that had taken place in the Nigerian banking industry raise an important question of whether bank consolidation enhances the financial sector’s performance in Nigeria.

As a prelude to other parts of this study, this chapter will discuss the background upon which this study was initiated, the statement of problems that led to this study, the Aim and Objectives of the study. Others are Significance of the study, Scope of work, Research hypothesis and questions, Limitation of the study and Definition of technical terms.

1.1 Background Of The Study

Mergers and acquisition is the most favoured or best financial means all over the world of saving companies from serious financial distress. Mergers would give such companies another hope to start all over again under a new management system or structure which must be very organized and has the financial resources to commence and continue the company. However, when we say merger, it implies the combination, joining or the fusion of two or more formerly independent companies into one organization or company with a common ownership and management without the coming together of these companies a merger cannot exist. That is, it is the liquidation of one company that leads to the coming together of these companies known as merging.

According to Abraham, He says in all human activities, there is usually success and failure business including banks is therefore no exception. In period of loan as were experienced in the mid seventies thrived in an abundance and squander mania. In such an era savings and investments are at their peak level conditions favorable for bank to flourish and grow.

During this period also, banks do not think means survive and substance. They were all interested in building state of the art corporate edifies to enhance their image and giving out loans indiscriminately without adequate realizable securities.

On the other hand, when the lay days are over and down turns take over the orders the days arrive and banks failure become the order of the day as a result of adverse macro- economic conditions. The situation as at now attained a dimension that can best be described as “cries” level in the banking sector which became characterized by default in loan repayment,, dis-saving and massive fraud of management level.

1.2 Statement Of The Problem

Investigation revealed that every private and public enterprise in Nigeria have their accounting departments and there are increasing cases of financial mismanagement in usually all the public and private organization in Nigeria.

Also the problem of this study lies on how the manager of the enterprises are able to recognize the role of accounting in their sectors so that these case of improper accountability will be minimized.

1.3 Aim and Objectives Of The Study

The main aim of this project is to examine the impact of Merger and Procurement as a Financial Decision to Bank Efficiency in the Nigerian Economy. In achieving this aim, the following specific objectives were laid out as follows:

  1. To enable the banks that lack general managerial ability to obtain it from other banks.
  2. To highlight among others the following nature of merger and procurement.

1.4 Research Questions

The study came up with research questions so as to be able to ascertain the above stated objectives. The specific research questions for the study are stated below as follows:

  • Can consolidation and acquisition increase the confidence Nigeria deposit have in Nigeria banks?
  • Does consolidation and acquisition have any significant reduction in unsystematic risks after a business combination?
  • Has consolation and acquisition achieve diversification of investment portfolio?
  • Is consolidation and acquisition in financial option to the productivity in banking industry in Nigeria economy?

1.5 Significance Of The Study

This study is of immense importance to the chief executive of banks, shareholders, employers and regulatory authorities, prospective investors in the financial sector and more.

The studies also help public especially the depositor to know the banks that are sound so as to understand distress.

The investor in the industry will also know where to direct or re-direct their investment for optimum return on their investments.

1.6 Scope Of The Study

Since the consolidation and acquisition cause in Nigerian banking industries, the study will be limited to three of the acquisition.

  1. Universal Trust Bank PLC by union bank of Nigeria Plc equity Nigeria banks limited by international bank Magnum Trust Bank by Guarantee Trust Bank on the consolidation part, this research will draw its data from bank consolidation in Nigeria.
  2. Platinum Bank of Nigeria by Habibi Bank of Nigeria, United Bank of African by Standard Trust Bank of Nigeria.

1.7 Limitation Of The Study

During the course of this study, many things militated against its completion, some of which are:

  1. Time Constraint:

    The time frame given to accomplish this project was very short due to school academic calendar and it was carried out under pressure which made the researcher not to implement some necessary features.

  2. Establishment Policies:

    Establishment policies posed a serious limitation as most staffs are not ready to release information needed for this research work. There were lots of information needed from the staffs of this establishment to enhance the study which took them time to release or they did not release at all for security purposes, hence the scope was reduced.

  3. Financial Constraint:

    Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

  4. Lack of Initial Cooperation from Respondents:

    A particular limitation of this work came as a result of the respondent refusal to offer their cooperation at the initial time they were contacted. This contributed in making the success of this research study difficult.

1.8 Definition Of Terms

Merger:

It is the fusion of two or more existing companies to become one of the existing companies.

Acquisition:

It refers to the outright purchase of one company of a controlling interest in the share capital of another company.

Take- Over -Bid:

A take-over-bid is one whereby an offer is made to all the shareholders in any class of share, to buy share reasonable to gain fully or /partial control of the company.

Partial Merger:

It is a merger carried out for the purpose of pooling sales or orders or for sharing of net profit such consolidation are temporary

…

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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