Title page i
Table of contents vi
1.1 Background to the Study 1-3
1.2 Objective of the study 3
1.3 Statement of the Problem 3
1.4 Research Questions 3
1.5 Research Hypothesis 3-4
1.6 Significance of the Study 5-6
1.7 Scope and Limitations of the Study 7
1.8 Definition of Difficult Terms 8
1.9 Plan of the Study 8
TWO: Literature Review and Theoretical Framework
2.2 Globalization Historical Perspective 11-12
2.3 Concept of Global 12-13
2.4 Nigeria in the Global Economy 13-16
2.5 Globalization and the Nigerian Banking
2.6 Effects of Globalization on the Financial
Challenges of Globalization and the Nigerian
Implication Of Globalization For Nigerian Banks And
Consequences of Gobalization on the Nigerian
THREE: Research Methodology and Design
3.1 Introduction 34
3.2 Sampling Techniques 34
3.3 Sources of Data Collection 34-35
3.4 Population of Study 35
3.5 Questionnaire Design 35
3.6 Restatement of Hypotheses 36
Of Data Analysis 36
FOUR: Data Analysis and Discussion
4.1 Introduction 44
4.2 Presentation of Data 44
Hypotheses Testing 45
of Findings, Conclusions and
5.1 Summary of Findings 54-55
5.2 Recommendation 55
5.3 Conclusion 55-56
1.1 BACKGROUND OF THE STUDY
have been different deductions about what globalization depicts. Some related
it to the scientist perspective, economic and social political perspective
while some view globalization from the information technology aspect, but
globalization under this research work or study, is viewed from the banking
this note there are so many definitions given to globalization by different
authors or scholars. Globalization can be seen as a process of integrating
economic decisions making such as: consumption, investment and savings all
across the world. It is a process of creating a global market in which all
nations are forced to participate.
other words globalization is a process of expanding economic cooperation among
states and this does not necessarily imply future breakdown of boarders.
can also be defined as the integration of national economies through trade and
financial transactions. It is a process
that has tended to reduce the ability of micro economic policy to achieve it’s
objectives without the due consideration of countervailing effects of competing
policies adopted by other nations. The effect of globalization on the Nigerian
banking performance has been the outcome of several factors among which are the
increase in the volume of international trade and capital flows, technological
improvement in the communication and data processing, and the deregulation of
domestic market for international financial transactions. The advance in
information and technology, telecommunication technology tends towards the
building of strong Nigerian banking system, in order to aid its efficient and
effective performance, especially with the new reform of recapitalization of
twenty-five, billion naira (#25,000,000,000)
over the globe, foreign banks has entered into countries and added another
dimension to a stiff domestic competition and in the process, significantly affecting
the structure of domestic banking markets. This is particularly evident in the United States,
central Europe, Latin
America and Asia, where foreign
old banks have captured growing share of key markets (Rose, 1999). The profiles
of the foreign banks that have entered into joint ventures with Nigerian banks
are intimidating. They have the capacity and potentials to restructure the
banking system of any country. The strategic alliances between Nigerian banking
system and foreign banks and the increasing resources of Nigerian banks to
foreign markets to raise capital fund are signs of movement towards the
globalization and the Nigerian banking industry. This has to a large extent aid
a magnitude level of great performance in the industry and of course tending it
to a greater height.
more, globalization has transformed the Nigerian banking performance in a
profound way by altering the size and structure of the firms that comprise it.
Major banks can now extend their branches network beyond national frontiers or
built strategic base in foreign financial centers by acquiring either local
banks or subsidiary banks. The network of financial connections, among bank and
other financial institutions is now embracing the global world.
has not only transformed the Nigerian banking system and or aid it’s
performance, but also has a positive impact on wholesale financial markets as
evidence by blurring-off the traditional barrier between commercial banking and
investment banking and asset management motivated by the boom in equity and
bond market, in high yielding instruments and the wave of merger and
acquisition, the Nigerian banks have expanded or introduced into the field of
investment banking by engaging in security operations.
globalization is simply viewed as the gradual evolution of markets and
institutions such that geographical boundaries do not restrict financial
transactions. Globalization of banking in any economy mean that domestic banks
have opportunities to engage in banking operations (accepting deposits, lending,
borrowing or investing) in foreign markets. They can issue or transact in
foreign financial instrument denominated in foreign currencies. Foreign banks
can also perform similar functions in the domestic economy. The impetus for
globalize financial market initially came from the de-regulation of the foreign
exchange and capital markets by governments of the developed countries,
especially the united states, United Kingdom and Japan. Perhaps the most
celebrated of all these was the de-regulation of the London stock exchange in
1986, Which made London to be the most open and competitive capital market in
the world (Eunamd Resnick, 2001). This was followed by wide spread
Liberalization of financial markets in both developed and developing economies.
in telecommunication contributed in no small measure to the emergence of global
financial markets. These technological advancement, especially internet based
information technologies, gives investors around the world immediate access to
the most recent news and information affecting their investments, sharply
reducing information costs. Another force that derives globalization is the
increasing desire of institutional investors and portfolio managers to diversify
their investment portfolio behind geographical boundaries. Finance theory holds
that international diversified portfolios are more efficient than domestic
the stabilization of finance and financial risk have been attributed to an
increase in the financial capability for engaging precision finance, the
integration of national financial institutions and the activities of the markets
they engage in, and the emergence of the global banks and the international
financial conglomerate, each providing a mix of financial products and services
in a broad range of market and countries. Financial and bank globalization has
resulted in two distinct development in global bank;
The traditional banking institutions
have evolved into financial services of creating new accounts. Additionally,
non-banks financial institutions now actively compete with banks both on a asset
and liability sides of the balance sheet thereby blurring the distinctions
between banks and non-banks institutions.
Also the rapid growth in the share of
other earning assets in the total asset and relative growth in the off balance
sheet items has unprecedented.
problems which this project work is interested in finding answers to are centered
on the following:
That globalization has doubtfully
performed up to the task in positively affecting the Nigerian banking industry
performance through its role of financial liberalization. That is, the presence
of foreign bank in a particular country and the establishment of the local
banks subsidiaries in foreign countries to aid international financial
To view how foreign bank participation
is associated with a reduction in profitability, non-interest income and
overhead expenses of domestic banks. Also to view how foreign banks brings
greater efficiency and competition in to the domestic banking industry.
Another problem to be analyzed in this
paper, is to examine how increased participation of foreign banks in the
domestic banking system has served as instrument of macro-economic reform to
recapitalize and rehabilitate troubled banks outside the boost in efficiency
and competitiveness of market operators.
Also, foreign banks entry into the
domestic market remains a contentious issue. Domestic bank fear the heightened
competition this might result to and worry that foreign banks will take away
their business. But financial globalization has made it possible for innovation
to spread quickly around the world. Those who skillfully adapt international
best practices to local conditions are most likely to succeed. Those that are
unable to adapt to a changing world will not serve their customers properly.
And to know how globalization aids or
facilitates integration between both foreign and domestic financial
institutions in the world and in particular, how globalization of banking in
Nigerian has aid the domestic banks in raising capital in the international
1.3 OBJECTIVES OF THE STUDY
major objective of this research work examined the role of globalization on the
performance of the Nigerian Banking industry.
also strived at the following:
To examine how globalization has
widened domestic banks marketability.
To examine the effectiveness of the Nigerian
banking system strategies in coping with the world competition.
To examine critically, the impact of
globalization the Nigerian banking performance
compare and contrast the experiences of the advance countries financial
performance under globalization with that of domestic financial performance,
1.4. RESEARCH QUESTION
some of the objective of this study to be realized, certain hypothesis must be
stated and tested and these must be prelude by some questions which are otherwise
called research questions. The following questions will be addressed in the
course of this research work:
What will be the implication of
globalization and Nigerian banking performance on the Nigerian economy?
What is the Apex bank (CBN) doing in
order to blur off the problems of poor infrastructural facilities in the
Nigerian banking system?
What are the factors responsible for
the unimpressive performance of globalization with the recent reforms on
Nigerian banking system?
What are the benefits of globalization
on the Nigerian banking performance?
What can be done to make Nigerian
banking performance among the best in the other global world?
1.5 RESEARCH HYPOTHESIS
conjectural statement for this research work in respect of the research questions
are as follows:
Ho1: Globalization and the
Nigerian Banking Performance will not enhance economic growth.
Globalization and the Nigerian Banking Performance will enhance economic
Globalization has no impact on the Nigerian Banking Performance.
Globalization has impact on the Nigerian Banking Performance.
Globalization has not facilitated the management of the Country’s foreign
reserve by the local banks.
Globalization has facilitated the management of the Country’s foreign
reserve by the local banks.
1.6 SIGNIFICANT OF THE STUDY
the successful completion of this work it is expected that the entire stated
objective should be realized, failure to achieve these, this research becomes
insignificance. There fore this significance is for the simple reasons, that it
will be of help for the attainment of the objectives stated earlier.
research work will also reveal the conformity of globalization in the banking
sector to the prevailing economic policy of the country understudy i.e. (Nigeria). At
the same time, it showcases the in-depth knowledge the students are expected to
have concerning the research work. Furthermore, the end result of this research
work would be germane and or imperative to academicians, investors, financial
institutions as well as the government who may be interested in making use of
the information’s available there in. However, it will as well widened the
knowledge and or the understanding of the generality of the people on how
globalization policies positively or negatively influence their day to day
business operation and management.
it is as well important to note that, at the end of this study, reasons for the
prevailing attitude of banks in Nigeria
towards globalization through their performance appraisal would be known.
1.7 SCOPE AND LIMITATION OF THE STUDY
This study was carried out in First
This research is limited by the
distribution of questionnaire to fifty (50) bank workers of first bank of
This research work is intended to
restrict it’s activity in the banking sector as regard globalization and the
Nigerian banking performance.
The finding may not be generalized to all
banks in the country (Nigeria).
The cost of financing this study may
hinder further progress in the research.
1.8 DEFINITION OF TERMS
GLOBALIZATION: In this content, it means the integration of
national economics through trade and financial transactions, consumption,
investment and savings, all across the world.
INTEGRATION: This implies to combine parts in to whole. In this study, integration means the
combination of globalization and the Nigerian banking system to aid efficient
LIBERALIZATION: This refers to the
freeing of trade, investment and capital flows between countries.
BANK: A bank is being defined as any institution
which is carrying on the business of banking like, taking deposit, making
payment and lending.
FINANCIAL MARKET: This is a composition of institutional
arrangement that facilitates the intermediation of funds.
ECONOMIC: In this study, it is defined as the study of
the way in which national resources are used and how the wealth they produced are divided and the
application of the principles to the need and prosperity of the society (LEZSON
1.9 PLAN OF THE STUDY
research study on the effect of globalization on the Nigerian banking
performance will be divided in to five (5) different chapters on the following
i. Chapter one: Introduction
ii. Chapter Two: Literature
Chapter Three: Research Methodology
iv. Chapter Four: Data analysis, results and discussions
Chapter Five: Summary,
Recommendations and Conclusions