IMPACT OF COVID-19 ON THE BANKING SECTOR
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IMPACT OF COVID-19 ON THE BANKING SECTOR
CHAPITER 1
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
A worldwide pandemic is the COVID-19 epidemic. It started in December 2019 in Wuhan, China, and spread quickly and more significantly across most of the world (James 2020).
Due to its extremely contagious nature, COVID-19 has affected and continues to afflict all global areas and regions (Ayomide 2020).
A broad family of viruses called COVID-19, also referred to as coronaviruses (COVID-19), can cause a variety of health issues, from the common cold to more severe conditions like the Middle East respiratory syndrome (MERS-CoV) and severe acute respiratory syndrome (SARS-CoV).
A new coronavirus strain that hasn’t been discovered in people before is known as a novel coronavirus (nCoV). More specifically, it is believed to be zoonotic, which means that it spreads between people and animals.
The governments of the majority of countries were compelled to enact restrictive measures and limitations in order to contain the virus that has altered the lives of numerous individuals, organisations, and institutions due to the virus’ deadly nature and the need to accept responsibility (Ezeh 2020).
Movement restrictions, closure of numerous organisations (including private enterprises), lock-downs, and other measures are among these restrictions.
However, these limits had unpleasant effects on a number of economic sectors, including banks, small and medium-sized businesses, nonprofit organisations, and social services.
A financial institution that deals with money and credit is a bank. It is a company that offers a wide range of financial services. It accepts public deposits and allocates the capital to profitable industries. Additionally, it offers the ability to send money from one location to another (Simion 1998).
A bank is a financial institution that is authorised to accept deposits and provide loans, according to Chiowen (2000). Additionally,
banks may offer financial services including safe deposit boxes, currency exchange, and asset management. Retail banks, commercial or corporate banks, and investment banks are just a few of the various types of banks.
Because a significant portion of their services weren’t used under the Covid-19 restrictive measures, banks had repeated downturns. Therefore, the purpose of this study is to determine how Covid-19 has impacted Nigeria’s banking industry.
1.2 STATEMENT OF THE PROBLEM
The Covid-19 epidemic caused a number of enterprises, organisations (both national and international), academic institutions, etc. to close their doors. Thus, this situation had an impact on the banking industry because many of its revenue-generating services were not frequently used.
Examples of these services include business investments, business loans, loans for rent, and loans for school fees. In addition, the decline in Naira to Dollar exchange rates and the non-repayment of business loans were among the problems that banks faced. This study is focused on analysing the impact of the Covid-19 epidemic on the banking sectors as a result of this note.
1.3 OBJECTIVE OF THE STUDY
The ultimate goal of this study is to analyse Covid-19’s effects on the banking industry. Other important goals include;
To evaluate the impact of the broad and pandemic COVID-19 on the banking sectors.
To determine the degree to which Covid-19 affects banks’ revenue.
To determine whether Covid-19 had an impact on banking activities.
1.4 RESEARCH QUESTIONS
1. How has the widespread and pandemic Covid-19 affected the banking industry?
What impact did COVID-19 have on bank profits?
Did Covid-19 have an impact on banking activities?
All banking services were used while Covid-29 was in place and under lockdown, correct?
1.5 RELATIONSHIP TO OTHER STUDIES
This study, which was conducted to reveal the trauma banks experienced as a result of this unanticipated breakout of Covid-19, would undoubtedly be of tremendous significance to the whole banking sector.
This study will also make recommendations for mitigating the impact of any ensuing pandemic on banking. This study will also be a source of knowledge for all academic staff who might conduct academic research on the subject at hand.
1.6 SCOPE OF THE STUDY
This examination only looks into how Covid-19 influenced Nigeria’s banking industry. Due to the severity of the Covid-19 case, the study was conducted at First Bank Nigeria Plc in Lagos state.
1.7 LIMITATIONS
The main limitations the researcher experienced over the course of this study were time, money, and the availability of materials in this research subject, as well as validating respondents’ responses to interviews and questionnaires.
1.8 DEFINITION OF TERMS
Coronavirus disease 2019 (COVID-19) is a contagious respiratory sickness brought on by a brand-new coronavirus strain that makes people sick.
Banks: A financial entity with a licence to lend money and accept deposits is called a bank. Commercial/retail and investment banks are two of the most prevalent categories of banks.
Banking Operations: A bank’s practises and procedures for making sure that customer transactions are completed correctly and accurately are referred to as banking operations.
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