Effect of Consolidation on the Performance of Nigeria Banks

1.0 Introduction Banking reforms have been an on going phenomenon around the world right from the 1980s, but it is more intensified in recent time because of the impact of globalisation which is precipitated by continuous integration of the world market and economies. Banking reforms involve several elements that are unique to each country based on historical, economic and institutional imperatives. In Nigeria, the reforms in the banking sector preceded against the backdrop of banking crisis due to highly undercapitalization deposit taking banks; weakness in the regulatory and supervisory framework; weak management practices; and the tolerance of deficiencies in the corporate governance behaviour of banks (Uchendu, 2005). Banking†¦show more content†¦The banking sector in emerging economies has witnessed major changes to compete, attract international investment and increase capital market growth. Banking crisis usually starts with inability of the bank to meet its financial obligations to its stakeholders. This, in most cases, precipitates runs on banks, the banks and t heir customers engage in massive credit recalls and withdrawals which sometimes necessitate Central Bank liquidity support to the affected banks. Some terminal intervention mechanisms may occur in the form of consolidation (mergers and acquisitions), recapitalization, use of bridge banks, establishment of asset management companies to assume control and recovery of bank assets, and outright liquidation of non redeemable banks. Bank consolidation, which is at the core of most banking system reform programmes, occurs, some of the time, independent of any banking crisis. Irrespective of the cause, however, bank consolidation is implemented to strengthen the banking system, embrace globalization, improve healthy competition, exploit economies of scale, adopt advanced technologies, raise efficiency and improve profitability(eseoghene,2010). Ultimately, the goal is to strengthen the intermediation role of banks and to ensure that they are able to performShow MoreRelatedA Report On Mergers And Acquisitions1013 Words   |  5 PagesMergers and Acquisitions have always been considered as a †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. and ever since the first merger in Nigeria in 1980, Merger and Acquisitions have occurred in most sectors of Nigerias economy. In 2004, the Central Bank of Nigeria in fulfillment of its mandate to Promote and maintain of monetary stability and a sound and efficient financial system in Nigeria rolled out a 13 point rolled out a 13-point reform agenda aimed at consolidating the banking sector and preventing the occurrence of systemicRead MoreIntellectual Capital And Corporate Performance In Nigeria1690 Words   |  7 PagesINTELLECTUAL CAPITAL AND CORPORATE PERFORMANCE IN NIGERIA BANKS Dr.Egungwu, Ikenna Banking Finance Department, Chukwuemeka Odumegwu Ojukwu University, Anambra State, Nigeria E-mail: ikennaegungwu@yahoo.com Egungwu, Ngozi Ursula Accountancy Department, Chukwuemeka Odumegwu Ojukwu University, Anambra State, Nigeria E-mail: ngoziegungwu@yahoo.com Abstract This study is on the interaction between corporate performance variables and Intellectual capitalRead MoreThe Effect of Bank Capitalisation on the Performance of Banks in Nigeria.5696 Words   |  23 PagesThe Effect Of Bank Consolidation On The Performance Of Banks In Nigeria Edit Article ------------------------------------------------- Top of Form Bottom of FormCHAPTER ONE 1.0  Ã‚  Ã‚  Ã‚   BACKGROUND OF THE STUDY The recapitalization and consolidation exercise in the banking industry by the former Central Bank of Nigeria Governor, Professor Charles Soludo has necessitated the need for different organization to engage in corporate Consolidation (mergers and acquisition). The concept of recapitalizationRead MoreImpact of Mergers, Acquisitions and Internal Growth on Organisations3189 Words   |  13 Pagesinvestigate these strategies by using Internet research, academic resources, journals, financial newspapers and textbooks. I will also be looking at the effect of different strategic options used to find out those that have been successful and those that have not. The fulcrum of this treatise is the Nigerian banking industry and the outcome of the consolidation exercise. Finally I will be comparing and contrasting both Merger and Acquisitions and Internal growth strategy among each other in order to findRead MoreMerger and Acquisition in Nigerian Banks2234 Words   |  9 PagesThe Performanc es of Commercial Banks in Post-Consolidation Period in Nigeria: An Empirical Review R.O.C. Somoye Associate Professor, Olabisi Onabanjo University, Ago-Iwoye, Nigeria P.O.Box 1104, Ijebu-Ode, Ogun State, Nigeria Tel: 2348033335688 E-mail: olukayodesomoye@hotmail.com; kayodesomoye@yahoo.com Abstract The current credit crisis and the transatlantic mortgage financial turmoil have questioned the effectiveness of bank consolidation programme as a remedy for financial stability and Read MoreBanking Industry in Nigeria5028 Words   |  21 PagesNIGERIAN ECONOMY POST-CONSOLIDATION By B. B. EBONG GROUP MANAGING DIRECTOR/CHIEF EXECUTIVE UNION BANK OF NIGERIA PLC ABSTRACT Against the backdrop of the role of banks as financial intermediaries and their function as the engine of growth of the economy, this paper examines the extent to which the banking industry has helped to stimulate economic activities in Nigeria and what the prognosis looks like in the post-consolidation era. The paper notes that the banking industry in Nigeria witnessed a remarkableRead MoreRetention Strategies in Post Consolidation Banking Industry in Nigeria (a Case Study of First Bank Nigeria Plc)1339 Words   |  6 Pagesan increasingly aggressive environment in which competition for revenue is top priority. The Nigerian Bank can now fit into the global definition of bank. Consolidation of the Nigerian Banking sector is one of many reforms of the Gen. Obasanjo s administration that Nigerians have to embrace happily. (Victor E, 2007) Prior to the reforms, the industry was highly fragmented, with many banks having very small and undiversified capitalisation. With a much higher capitalisation base, the NigerianRead MoreImpact of Computer in Banking System in Nigeria2674 Words   |  11 Pagesbanking system in Nigeria. The finding of this research has show that computer has ... The Role of Computer in Enhancing Banking (Cache) (Images) (Similar) http://www.scribd.com/doc/27530168/The-Role-of-Computer-in-Enhancing-Banking However the use of computer in banking sector can be an efficient tool in ... Banking Sector Consolidation in Nigeria - Issues and Challenges by ... (Cache) (Images) (Similar) http://www.scribd.com/doc/11846500/Banking-Sector-Consolidation-in-Nigeria-Issues-and-ChaRead MoreEffects of Finanacial Crises on Nigerian Capital Market5207 Words   |  21 Pagesdevelopment, exposure and insulation of the domestic market from the vagaries of the international. In the case of the Nigerian stock market, following initial relative insulation, the speed of contagion and response was comparatively slower. However, the effects began to manifest in the first quarter of 2008. All market indicators commenced a downward spiral. Negative market growth ensued. The mono cultural dependency of the Nigerian economy contributes to the exposure of the economy to global financial crisesRead MoreThe Accounting Profession and Nat39077 Words   |  157 Pagescorrespondence, enquiries, contributions and research notes should be submitted to: The Editor, The Journal of Accounting, C/o Nigerian College of Accountancy, Plot 42T Bauchi Ring Road, Dogon Dutse, P. M. B. 2734, Jos, Plateau S tate, Nigeria. Subscription Rates: Nigeria Outside Nigeria - N1000 (Exclusive of postage) N1000 $10 (Exclusive of postage) Prof. Edet R. Iwok Editor-in-Chief iv EDITORIAL Like any other profession, Accounting is not static. It constantly responds to the dynamism of