TREASURY MANAGEMENT STRATEGIES AND CHALLENGES IN THE BANKING INDUSTRY
This research work was conducted to examine Treasury management strategies and challenges in the Nigeria. Banking industry, identifying the various types of bank treasury products, their challenges and the strategies applied by difference banks in marketing their new and existing treasury products. The study analyses the treasury management responsibilities assumed by financial departments and develops a model to confirm those responsibilities. The study has also developed an explanatory model that brings together the man functions of the treasurer by means of two concepts: (i) basic cash management, which group the management of collections and payments, liquidity monitoring in banking operations, short term treasury forecasts, management of banking balances on value data and negotiation with financial organisation; and (ii) “advanced cash management”, which includes the management of the financing of the positioning of treasury peaks and the management of financial risks.
1.1 BACKGROUND OF THE STUDY
Treasury function emerged as a result of the sophistication of banks. After the recapitalisation of banks capital to N25 billion in 31 December, 2005 due to increasing competition, Banks have initiated a lots of product to enhance their treasury function, knowing that treasury product which is an important aspect of banking activities especially as Banks operate at the short end of the financial market known as money market. Indeed treasury function is a critical tool for controlling liquidity. Interest rate and off balance-sheet risks, loans deposits, borrowed fund pricing and the execution of assets and liability management policies.
Management of bank treasury comprises fund acquisition, investment in marketable securities, hedging and the management of the bank’s reserve account at the central bank. for a bank to be remain profitable and also be able to manage their liquidity position, such bank should develop treasury management strategies needed to compete with other banks in the industries, they should also develop and market new treasury product which will enhance their liquidity and profitability position.
Banks when trying to manage its treasure products faced many challenges which may come from customer when deciding on going to the other bank that they can understand their treasury product or collect prime interest rate. Another challenges may be from the regulatory authorities (CBN) by trying to regulate the liquidity position of commercial bank initial new policy guidelines which all banks must comply with. These and other are the are which the researcher will cover in the conduct of this research work.
1.2 STATEMENT OF PROBLEMS
1. The treasury management and inadequate liquidity has recorded some initial failure on Banks.
2. The evolve of Union Bank Plc to make phenomenal profit, by making them to be careless or resources utilization and particularly their treasure management.
3. The inadequacy for the management strategies holding by banks.
4. The inability of the Union Bank Plc and UBA Bank Plc to fulfil both its short and long term obligation, it is based on the management of liquidity.
1.3 OBJECTIVE OF THE STUDY
The under-listed point generally make up the objectives of the study, they are as follows:
a. To investigate the various techniques it treasury management in UBA Plc and Union Bank Plc and also identify peculiar problems in the management of treasury products.
b. To find out, it the banks have initiated new strategies in marketing and management of their treasury products.