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.....
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Item Type: Postgraduate Material | Attribute: 85 pages | Chapters: 1-5
Format: MS Word | Price: N3,000 | Delivery: Within 30Mins.
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