EVALUATING THE IMPACT OF BANK DISTRESS ON THE PROFIT GROWTH OF DEPOSIT MONEY BANKS (A CASE STUDY OF SELECTED COMMERCIAL BANKS). A RESEARCH PROJECT MATERIAL ON BANKING AND FINANCE
ABSTRACT
This work “Evaluating the impact of Bank Distress on the profit growth of Deposit Money Banks. The causes of bank distress in Nigeria and the possible prevention strategies or failure resolution options of bank distress. The review of related literature was done to give an in depth knowledge of the topic to the researchers. Both primary and secondary sources of data were used by the researchers. Simple statistical tools like T-test, least square (B) and tables were used to analyze the data collected. The following findings were made; Banks made lower profit during distress period and higher profit during distress period and higher profit after distress period. Meanwhile, banks generally made lower profit during distress period. 1 recommended that the supervisory arsenals to ensure minimum distress with little or no effect when it occurs.
CHAPTER ONE
INTRODUCTION
Background of the Study
In any modern economy, the efficient production and exchange of goods and services requires money and bank is the instrument for affecting it. The last few years have been both traumatic and revolutionary for the banking industry. The industry produced the largest number of technically insolvent and under capitalized banks. The magnitude of distress in the nation’s banking industry reached on unprecedented level making it an issue of concern to the government, the regulatory authority, the bankers and the general public.
The Nigeria banking scene was characterized by changes designed to promote banking in the country. The changes may be categorized into phases, but due to the nature of our work we will consider two phases: namely, the era of laissez-fair banking (1894-1952), the era of limited banking regulator (1952-1958). During the first phase, banking industry was monopolized by foreign banks, principally the African banking corporation which was the precursor of the (BBWA) British Bank for West African the present First Bank of Nigeria the Barclays bank DCO (Dominion Colonial and Overseas) the present day Union banks, and the British an French Bank, the for-runner of the present United Bank for Africa. Although discrimination against Nigerians by these banks led to the establishment of some indigenous banks which unfortunately offers litter or no competition to the foreign banks essentially because of their weak capital base or poor managerial capacity. Consequently, all but three of the indigenous banks failed. The survived includes the National Bank of Nigeria established in 1933, the Agbomagbe Bank (now Wema Bank) established 1945 and the Africa Continental Bank 1947.
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