ABSTRACT
This study examined the effect of banking sector consolidation and acquisition on the productivity and profitability of deposit money banks in Nigeria. In order to achieve the objectives of the study, two hypotheses were formulated and data collected through the issue of questionnaires and also collected data from the annual reports of the banks covered in the study. The data collected was analysed using multiple regression analyses on SPSS. In the course of the research, the following findings were made: that there was a significant and positive relationship between banking sector performance and consolidation and acquisition. On the basis of the findings, we concluded that the banking system consolidation embarked on by banks was very critical to good financial performance. Thus, we recommend that there is need to continually monitor the gains of the sector reforms/consolidation to forestall any crisis that may impinge on the progress made.
INTRODUCTION
............. According to Enyi (2007), the grand objective in the banking sector reforms was to re-engineer and fast-track a system that will engender confidence and power a new economy. But whether this objective can be achieved will depend to a large extent on how the reform is implemented. Going by the main focus of the reform, banks recapitalization and consolidation stands out. The main method by which this aspect was achieved was by asking individual banks to raise their capital base to a minimum of N25Billion or in the alternative merge with others.
The merger and acquisition option thereafter became the most feasible solution as only Zenith Bank Plc was able to reach this level out of the entire 89 banks. Business combinations result as spin-off effects from corporate restructuring. Owing to the ever changing nature of global business environment culminating from rapid interactive economic movements as driven by innovations and obsolesces in technology, corporate restructuring had become a regular exercise in capitalist and semi-capitalist economies.
The Central Bank of Nigerian’s resolve to carry out reforms in the banking sector was borne out of the past of the nation’s banking industry. Between 1994 and 2003 a space of nine years, no fewer than 36 banks in the country closed shops due to insolvency. In 1995 four banks were closed down. But 1998 may go down well in history as the saddest year for the banking industry as 26 banks closed shops that year. Three terminally ill banks also closed shops in 2000. In 2002 and 2003 at least a bank collapsed.
The failed banks had two things in common – small size and unethical practices. Of the 89 banks that were in existence as at July 2004, when the banking sector reforms were announced, no fewer than 11 banks were in distress. According to the CBN, between 69 and 79 of the banks were marginal or fringe players. In fact, an assessment of the Nigerian banking industry shortly before the pronouncement of the consolidation agenda shows that while the overall health of the system could be described as generally satisfactory, the state of some banks was less cheering. ...............
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CHAPTER ONE: INTRODUCTION
1.1 BACKGROUND OF THE STUDY
1.2 STATEMENT OF THE PROBLEM
1.3 PURPOSE OF THE STUDY
1.4 RESEARCH QUESTIONS
1.5 RESEARCH HYPOTHESES
1.6 SIGNIFICANCE OF THE STUDY
1.7 SCOPE OF THE STUDY
1.8 LIMITATION OF THE STUDY
1.9 DEFINITION OF TERMS
1.10 ORGANIZATION OF THE STUDY
REFERENCES
CHAPTER TWO: LITERATURE REVIEW
2.1 INTRODUCTION
2.2 THEORETICAL FRAMEWORK
2.3 TRENDS IN BANK CONSOLIDATION
2.4 AN OVERVIEW OF THE NIGERIAN BANKS CONSOLIDATION EXERCISE
2.5 STRATEGIES FOR CONSOLIDATION ADOPTED BY NIGERIAN BANKS
2.6 BANK CONSOLIDATION IN NIGERIA
2.8 CONSOLIDATION AND PROFITABILITY
REFERENCES
CHAPTER THREE: RESEARCH METHODOLOGY
3.1 INTRODUCTION
3.1 RESEARCH DESIGN
3.2 SAMPLE SIZE DETERMINATION
3.3 DATA COLLECTION METHOD
3.4 DATA ANALYSIS TECHNIQUE
CHAPTER FOUR: DATA PRESENTATION AND ANALYSES
4.1 INTRODUCTION
4.2 DATA PRESENTATION
4.3 TEST OF HYPOTHESES
CHAPTER FIVE: DISCUSSIONS, CONCLUSIONS AND RECOMMENDATIONS
5.1 DISCUSSION OF FINDINGS
5.2 CONCLUSION
5.3 RECOMMENDATIONS
BIBLIOGRAPHY
75 Pages
Reference code: c033
Reference code: c033
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