MERGERS AND ACQUISITION AND THE BUSINESS DEVELOPMENT IN THE BANKING SECTOR
Need help with a related project topic or New topic? Send Us Your Topic
DOWNLOAD THE COMPLETE PROJECT MATERIAL
MERGERS AND ACQUISITION AND THE BUSINESS DEVELOPMENT IN THE BANKING SECTOR
Chapter one
INTRODUCTION
1.1 Background of the Study.
The Nigerian economy is facing national and global economic challenges, so financial institutions, particularly the banking sector, have the option of sanitising and restructuring their operational processes in order to revive the depressed economy
as well as embarking on a consolidation exercise that would have some wider structural effects on industry and the economy as a whole.
Essentially, banking is a service sector administered by humans for the benefit of the general public while producing returns to shareholders. As such, it is logical that the services offered by the industry cannot be completely efficient;
However, there is always room for improvement, and this statement serves as the foundation for our subsequent discussion of this study. The banking sector and business development in third-world economies have been grossly undermanaged when compared to their counterparts in developed countries around the world.
These developments have made it vital for Nigerian banks to sanitise and rebuild their operational processes in order to keep up with global trends and resuscitate the country’s poor economy.
Prior to the implementation of the structural adjustment plan (SAP) in 1986, the banking sector consisted of a small number of banks. The operators of these banks had practically complete control over the banking business development since clients had to hunt for their services, which were often of poor quality.
Because of the pressure to deliver banking services, the managers had limited time to market their bank’s services or invent new products to improve customer service while also receiving changes depending on the permitted tariff. Customers could spend hours attempting to get service in the banking hall because there was little competition and large waits.
The quality of the bank staff was poor, they were rude to their customers, and most of the time; they peet they were doing a favour to their customers, as at that time, no Nigerian bank had neither a simple computer nor a network of computers for online banking in the area of credit-appraisal
Ezeikpe (1993) observed that they were too conservative in extending credit facilities, the system was highly underbanked, and the payment mechanism was filled with imperfections.
1.2 Statement of Problem
Evidence has shown that the banking industry is undergoing several transformations as a result of increased deregulation and liberalisation; thus, the current wave of restructuring in the sector is necessary to respond adequately to the rapidly changing and increasingly competitive business in order to revive.
Banks who are unable to restructure in response to the industry’s global transformation demonstrated that they are prepared to fall down the drain and be liquidated.
Between 1991 and 1997, the NDIC liquidated 31 Nigerian banks owing to long-term difficulty, but some of the casualties may have been avoided if adequate restructuring methods had been applied.
In this era of customer sophistication and advancement in information technology, bank management should learn to be proactive and more efficient in product/service delivery; they should constantly review their operational strategy in readiness for the ongoing global challenges;
more so, as customers are becoming aware of their environment and ready to move their funds to where their demand would be adequately met while yearning for more personalised service in cons.
Need help with a related project topic or New topic? Send Us Your Topic