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Product Category: Projects

Product Code: 00000385

No of Pages: 99

No of Chapters: 5

File Format: Microsoft Word

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This project focuses on the post consolidation challenges faced and opportunities had in the banking sector in Nigeria.

Highlighted in chapter one includes; Background of study, objectives of study, scope of study, limitations of the study etc.

Chapter three discussed the Research Design, Population of the study, method of data collection, statistical tool, etc.

In chapter four, data presentation and analysis were discussed among others.


Lastly chapter five looked at the summary, findings, conclusion and recommendation.


Table of contents

Title --------------------------------------------------------------    i

Certification------------------------------------------------------   ii

Dedication -------------------------------------------------------   iii

Acknowledgement-----------------------------------------------           iv

Abstract-----------------------------------------------------------           v

Table of content-------------------------------------------------   vi


CHAPTER ONE:  Introduction

1.1 Back ground of study -------------------------------------    1

1.2 Statement of problem ------------------------------------    2

1.3 Objectives of the study -----------------------------------    2

1.4 Research questions ---------------------------------------     3

1.5 Hypothesis formulation ----------------------------------     3

1.6 Significance of the study --------------------------------      4

1.7 Scope of the study ---------------------------------------      4

1.8 Limitations of the study ---------------------------------      4

1.9 Historical background of case study ------------------       5

1.10 Definition of terms --------------------------------------      7


CHAPTER TWO:  Review of related literature

2.1 Introduction ----------------------------------------------     9

2.2 An overview of the banking sector -------------------      10

2.3 Problems/ issues of the Nigerian banking sector --        12

2.4 Banking sector reforms ---------------------------------       13  

2.5 Pre Soludo Reform Era ---------------------------------      16

2.6  Consolidation --------------------------------------------      17

2.7  Guidelines and incentives on consolidation ---------              18   

2.8  Objectives of consolidation ---------------------------       23

2.9  Mergers and acquisition -------------------------------              24     

2.10  Post consolidation Challenges and opportunities --     30

2.12 Need for a regulatory framework -----------------------   43

2.13 The Nigerian deposit insurance corporation (NDIC)

 and its Role its role in the Nigerian financial safety net. 49 

2.13 Bank consolidation- Induced challenges to NDIC ----- 51


CHAPTER THREE Research design and methodology

3.1 Introduction ---------------------------------------              61

3.2 Research Design -----------------------------------             61

3.3 Population of the study --------------------------              61

3.4 Instrument for data collection -------------------             62

3.5 Method data collection ----------------.----------              62

3.6 Re-statement of research questions ------------             63

3.7 Re-statement of hypothesis ---------------------              64

3.8 Validity of the instrument ------------------------              64


CHAPTER FOUR:  Data presentation and analysis

4.1 Introduction  -------------------------------------------------  65

4.2 Data presentation -------------------------------------------- 65

4.3 Data analysis ------------------------------------------------- 65

4.4 Summary  ----------------------------------------------------   83


CHAPTER FIVE:  Summary of findings, conclusion and recommendations

5.1 Summary of findings --------------------------------------   84

5.2 Conclusion --------------------------------------------------   85

5.3 Recommendations ----------------------------------------     86

           Bibliography-------------------------------------------------  88

      Appendix: Questionnaire ---------------------------------   92












Barter gave way to monetary exchange as the dominant trade system around 3950 BC, and then was the imperative of banking born. Banking, known to have been started by the Italian goldsmiths who settled in London at about the 17th century to do business, began by accepting customers deposits of gold coins and other valuables for safe keeping.


In Nigeria, banking came with the advent of colonial masters (The British colonialists) in the 19th century. Banking preceded banks. Banking is essentially collecting deposits and lending to individuals and institutions experiencing deficit for a fee and according to established rules, instructions and procedures. The banking industry has however transformed over time. In the new millennium, particularly in the last few years, changes in the fundamental and social forces affecting banks have been witnessed. Factors such as double-digit inflation, unemployment, foreign currencies, liquidity mop-up, new financial products and services, revised pricing strategies and guided deregulations have completely reshaped the financial industry. Banking has become computerized. Electronic banking is the most common form of banking today. The use of credit cards and automatic teller machines has been adopted as modern banking procedures.


Most industries go through a cycle; entry, growth, Consolidation, maturity/shakeout. Consolidation is simply another way of saying survival of the fittest (bigger, more efficient, better capitalized, more skilled etc). Consolidation is part of the natural evolution of industries; Obafunmilayo Agusto (CBN report).


Consolidation is primarily driven by business motives and/or market forces and regulatory interventions. The Banking Sector in Nigeria has gradually been consolidating over the years. But the question “is consolidation a solution for banking inefficiency?” still remains.



The importance of banking and issues emerging from the banking sector in Nigeria has prompted several questions in the minds of the Nigerian public. This study is designed to give answers to those questions

1. Why did consolidation result in the Nigerian banking sector?

2. What was consolidation aimed at?

3. How was consolidation carried out in the Nigerian banking sector?



Consolidation is an important phase in the cycle of industries, hence the general objective of this study is to give details on banking sector consolidation and also analyzing its challenges and opportunities. Furthermore the study aims specifically at

1.  Giving reasons for consolidation

2.  The achievements of consolidation

3.  Showing how consolidation was carried out in the banking industry

4.  Giving details on the survival of banks. This includes merging and acquisition.

5.  The idea of the central bank of Nigeria over consolidation

6.  The need for a regulatory framework for banks and the formulation of such regulatory framework.



This study is designed to give answers to the following

1.    What were the challenges faced by the Bank during the recapitalization or consolidation era?

2.    How did the bank survive?

3.    What are the opportunities present?

4.    Conclusively, did consolidation favour the bank?

5.    Were there significant impacts on the bank due to consolidation?

6.    Is corporate governance strictly adhered to by the bank?



The researcher is aiming at enquiring the impact of consolidation on the banking sector of Nigeria. The researcher in this study tries to test the following

Hypothesis I

H0:   Consolidation has no significant effect on the performance of banks

H1:   Consolidation has a significant effect on the performance of banks

Hypothesis II

H0:   There are no post consolidation challenges and opportunities for banks

H1:   There are post consolidation challenges and opportunities for banks



The banking sector of Nigeria contributes immensely to the wealth of the nation and to economic growth and therefore is a relevant case study in event of restructure. This study is focused on enlightening the society at large on the events in the banking sector, specifically pre and post consolidation. It also focuses on bringing to knowledge the activities of consolidation, the rulers of the banking sector. Academically, this study is an expansion of knowledge. In recent times, the banking sector of Nigeria has contributed to the high employment rate hence it is a source of livelihood even to the nation Nigeria, therefore a significant event as bank consolidation is a relevant area of study



The researcher intends limiting the scope of the study to a case study. Analysis and conclusions are based on the banks activities. The authenticity and correctness of the conclusions depends on the reliability of the source of the data. He also limits his assumptions on the formulation of hypothesis i.e. method.



The limitations encountered by the research in the course of carrying out this research are:

a.           Financial constraints: The researcher conducted this research with limited financial assistance.

b.          Difficulty in getting the attention of bank staff: In conducting this research, the researcher encountered difficulties in getting the attention of bank staff.

c.           Distance or proximity to bank:  The researcher also found it difficult to meet up to several engagements due to the distance of the bank from his location.

d.          Concealing of information by staff: Due to the nature of the respondents of the questionnaire (Bank staff), the researcher found it difficult to obtain several information and data. Also access was not fully granted to the researcher on his required materials.



The United Bank for Africa (UBA) was incorporated in Nigeria as a limited liability companion 23rd February 1961 under the companies’ ordinance (cap 37.  It took over the assets and liabilities of the British and French Bank Limited, which had carried on banking business in Nigeria since 1949. The bank shares are currently quoted on the Nigeria Stock Exchange (NSE).


It had branches all over the country. With its network throughout the country, if both domestic and international bank with worldwide connections. 


The company is engaged in the business of banking and provides corporate, commercial consumer and international banking, trade services, cash management transory and capital market services and products. Trust services, pension management services are provided through a subsidiary company, UBA capital and Trust Limited (previously UBA) Trust Ltd)



The affairs of the bank are administrated by Board of director comprising a non-chairman and 17 other directors of whom 5 are executive including the managing Director and chief Executive officers.  The Board meets at least 4 times a year to conduct the affiars of the bank. In addition, the Board currently has 6 committees to consider in more detail, various aspects of the Boards responsibilities.


The business strategy committee recommends strategic initiative to the Board and reviews human resources development at the more senior level of the Bank.

·        The ethnic and corporate governance committee ensures best practice in corporate governance, ethic and compliance with all applicable laws and regulation.

·        The executive management committee ensures implementation of strategy and operational management of the bank.

·        The government and public affairs committee maintains good public relations with the government and various stakeholders.

·        The nomination and evaluation committee review executive performance, compensation and succession planning.

·        The risk management committee considers and approved the credit and risk management policies of the bank

·        However, inspite of the seemingly impression programmes and progress as well as achievement of the bank, things seems not quite all right. There is acute economic depression allover Nigeria – the business environment in which the bank operates.


This has compelled the banks to operate budget deficits, i.e a state at which the bank spends more than its revenue. This by itself creates a curious compensation problem.


1.10   DEFINITION OF TERMS          

Capital base: This refers to paid-up capital and reserves unimpaired by losses.


Reserves: Assets kept back for future use. It includes all reserves except asset revaluation surplus resulting from revaluation in the course of consolidation.


Paid-up capital:  This refers to ordinary shares plus non-redeemable preference shares.


Parties to the Consolidation:  In the merging of banks, their boards and managements, financial/investment advisers, lawyers, accountants, auditors, shareholders and any other persons involved in the transaction are parties to consolidation.


Barter: To exchange goods and services in return for other goods and services.


Bank: A business that keeps money for individual people or companies, exchanges currencies, makes loans, and offers other financial services.


Consolidation: The bringing together of business or business activities into a single unit.


Merger: The fusing together of two or more companies or organizations.


Acquisition: Asset that has been recently acquired.


Financial statement: A statement that shows the financial activities of a company for a given year.

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