AN EXAMINATION OF THE SOUNDNESS OF BANKS IN NIGERIA: A CASE STUDY OF SELECTED BANKS

ABSTRACT
The objective of this study is to examine the soundness of Banks in Nigeria: A case study of Access bank, Afribank, Ecobank, First Bank and Standard Chatered Bank were used. Data for the research were collected through primary and secondary sources namely the annual reports and account of the respective banks, Central Bank of Nigeria(CBN) banking supervision unit annual reports on the banks, textbooks , journals and seminar papers..
The data were analyzed and presented using tables, simple percentage and ratios based on CAMEL specifications. The hypotheses were tested using CBN bench mark for CAMEL and simple percentages.

The findings of the study showed that the liquidity level of banks did not fall short of CBN bench mark of 30%during the study period; the banks’ capital adequacy exceeded the CBN bench mark of 10% during the study period; the banks gross earnings has been on the increase during the study period; the banks have good asset quality as evidenced by their level of performing loans during the study period; the banks management were efficient and have the expertise required to manage their banks during the study period.

CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Over the years financial system stakeholders have typically paid considerable attention to the significance of the banking sector in the development process, with limited thinking on the promotion of banking system soundness, except until recently with introduction of the banking sector reform. Bank soundness refers to the ability of banks to withstand adverse economic conditions and their ability to promote economic development [CBN, report 2005].

Reform are usually introduced either in response to the challenges posed by factors and developments such as systemic crisis, deregulation ,globalization and technological innovation or as a proactive measures both to strengthen the banking system and prevent system crisis, as in the case of the current reforms.

A sound banking system must be able to facilitate economic development and provide a platform for sound economic policy implementation and ensures that customers and other stakeholders in the banking industry are satisfied. The importance of the banking system to the economy cannot be over-emphasized and it is on this ground that a study on the soundness of banks in Nigeria becomes necessary.


An examination of the soundness of banks in Nigeria was conducted by looking at their capital adequacy, management expertise, assets quality , earnings, liquidity and sensitivity to market risk; as these variables helps to evaluate the performance of these banks and by so doing determine their soundness.

1.2       STATEMENT OF THE PROBLEM
Safety and soundness of the banking system remains one of the key mandates of the Central Banking of Nigeria [CBN]. This informed the revolutionary effort by the CBN to strengthen banks, refocus and reposition them to meet the global challenges and play a pivotal role in supporting the growth of the Nigeria economy.

Inspite of the effort of the CBN, banks are still not sound as the suppose to be. People are still sceptical as to the soundness of banks in Nigeria in the face of the current economic meltdown. Most Nigeria still feels banks suffer from Some problems such as ; Capital inadequacy, low earnings, poor assets quality, liquidity problems, weak corporate governance, inability to finance large capital projects, poor rating by international rating agencies and weak financial intermediation.


The problems identified above, informed the decision to carry out a research work that will examine banks capital adequacy, assets quality, liquidity ratio, management expertise and sensitivity to market risk in order to determine the health and strength of our banks to meet emerging economic challenges and to able to compete favourably internationally ; as only a resilient bank can withstand risks associated with the current global economic and financial meltdown.....

For more Banking & Finance Projects click here
================================================================
Item Type: Postgraduate Material  |  Attribute: 85 pages  |  Chapters: 1-5
Format: MS Word  |  Price: N3,000  |  Delivery: Within 30Mins.
================================================================

Share:

No comments:

Post a Comment

Select Your Department

Featured Post

Reporting and discussing your findings

This page deals with the central part of the thesis, where you present the data that forms the basis of your investigation, shaped by the...

Followers