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This project work investigates the origins and application of money in the commercial banking industry, with a focus on Access Bank Nigeria Plc.

This is an attempt to investigate and reveal the extent to which the bank obtains funds and how those funds are used to achieve the bank’s goals and objectives, with particular reference to accounting principles and the Central Bank’s Prudential guidelines for commercial banks.

A review of connected literature, text books, magazines, newspapers, journals, and even the appropriate website on the internet will be explored for simple reviews, analysis, and down loading of current related material for the project work will also be included.

The study will also incorporate data collection methods such as primary and secondary sources, interviews, observations, and evaluation of existing bank records. The major challenges that will be encountered during the course of this project are time and financial constraints because collecting and analysing data takes a lot of time,

as does paying regular visits to the case study location, attending lectures, writing assignments and quizzes, visiting the cyber café for internet browsing, and attending to one’s domestic responsibilities.

The key limiting elements to the project work are financial needs such as the manufacture and distribution of questionnaires, transportation, and binding of the project work expenses. The research study will also emphasise the need of prudential management and project accountability,

as well as strong lending and advance policies, as a means for the bank to gain maximum liquidity and effective use of accrued money by customers and shareholders. The challenges of modern banking in a global context, as well as appropriate answers and ideas for bank expansion, investments, and improved client interactions, will be highlighted.


Background of The Study

The source of funds in an organisation refers to the numerous methods by which financial inflows to run the firm are realised. Some of the ways funds entered a firm are as follows:

As a result of an increase in liability

Increasing one’s net worth

A reduction in asset value

Using a net profit after taxes

Through the sale of shares, either preferred or common stock

It also demonstrates how additional funds enter the organisation through consultant fees and loan borrowing. Summarise sources of cash to any organisation Describe all of the ways money enters an organisation for operational use and achievement of stated aims and objectives.

However, in order for an organisation to prosper, it must spend money in order to achieve its stated aims and objectives; consequently, application of funds refers to the different ways in which sourced funds are used to improve the value of fixed or working capital. The different ways monies can be used are as follows:

When there is a rise in assets

Where there is a reduction in liability

Where there is a cash dividend payout

When stock is purchased

When there is a drop in net value.

After explaining the meaning of the sources and applications of funds in a financial organisation, it will be interesting to observe what accounting authorities have to say about the same subject. The Accounting Standards Steering Committee (ASSC) requires all enterprises with a yearly gross income of N25,000 or more to publish finances statements in Standard Accounting Practise No. 10 (ASSAP 10). It presents the declaration and principles driving its preparation in its explanatory notes as follows.

That a company’s profit and loss account and balance sheet should show the amount of profit earned during the year, as well as the disposition of the company’s resources at the beginning and end of the year.

However, in order to gain a better knowledge of the company’s operations, it is required to identify the movements of assets, liabilities, and capital that occurred over the year, as well as the impact of such movements on net liquid funds.

The above statement is not directly expressed in the balance sheet or profit and loss statements, but can be made available in the form of a fund statement (statement of sources and application of funds).

Though the fund statement is not a replacement for the profit and loss account or the balance sheet, it does contain information from the two above in summary form. The goal of such a statement is to indicate how a company’s operations are financed, and the format chosen should be structured to accomplish this goal.

A fund statement should be able to show the sources of funds that flow into the organisation as well as how they are used. It should clearly illustrate the money generated or absorbed by the operation of the firm, as well as how any resulting surplus of liquid assets has been deployed or any shortage of such assets has been financed, distinguishing between the long and short term.

The statement should also distinguish between cash spent to purchase fixed assets and monies utilised to expand the company. The fund statement will connect the balance sheet at the start of the period, the profit and loss for the period, and the balance sheet at the end of the period.

A minimum netting off should occur since this tends to highlight the significance of certain major statistics, such as the sale of one building and the purchase of another in a finances statement.

The statistics used to create a fund statement should be easily recognised in the net profit and loss account, balance sheet, and any linked accounts or notes. Furthermore, the fund statement should include the following information:

Profit before tax or loss for the accounting period, adjusted for factors that did not utilise or provide funds, such as depreciation. The individual who paid and others who were proposed to be compensated.

Purchase and sale of fixed and other non-current assets.

Fines incurred as a result of expanding or using funds to repay or redeem the company’s medium or long-term loans or issued capital.

Increases and decreases in working capital subdivided into its components, as well as changes in net liquid cash. Net liquid cash is defined as cash on hand and in the bank less bank overdrafts repayable within a year.

Increases in liabilities and decreases in assets are considered sources of funds, whereas decreases in liabilities and increases in assets are considered applications. The following are some of the functions of commercial banks.

i) Acceptance of Deposits

On a current account, the money is available for withdrawal by cheque on demand. Customers will not be charged interest on this account. The Access Bank current account is a versatile account that provides customers with a variety of new modern banking services in person, online, or over the phone. Access Bank offers the following current accounts.


Account shared

Company account

Non-governmental organisations (NGOs)

Sole proprietorship/business account

Account for collaboration

Account for trustees/executives/administration

Accounts for unincorporated organisations, clubs, and associations

ii) Savings Deposit Account:- This is another interest-bearing account in which clients can only withdraw money using a pass book and deposit money using the same pass book or the bank teller.

The Access Bank Savings Account pays a competitive interest rate on the full closing balance each month.

The following are the account’s characteristics:

There are no cots.

Quarterly account transaction statement

There will be no invoices for withdrawals.

Withdrawals and deposits are accepted at any of their branches.

Request a transaction statement.

It also provides electronic banking, which includes Internet Banking, Telephone Banking, and Mobile Banking, allowing users to access their accounts from virtually any location.

iii) Domiciling Account:- These are accounts held in currencies other than the Nigerian naira, and they are critical to the business operations of entrepreneurs due to the globalisation of business issues and possibilities.

Access bank domestic accounts to perform the following transactions:

Transferring funds by telegraph to a third party

Withdrawal of foreign currency cash and traveler’s checks.

Cash deposits in foreign currencies and traveler’s checks

Choosing foreign currency cheques and issuing foreign currency draughts

Credit lottery winners

The following currencies are supported by the Access Bank Domiciliary Account:

Dollars (USD)

The British Pound

Euro Starling

The Access Bank Domiciliary Account has a minimum initial balance of $500 USD or its equivalent in Euro or Pounds Starling.

iv) Long-Term Funding

Access Bank assists their customers in achieving their long-term business goals by offering a diverse range of financial choices to meet their specific needs. This is specifically addressed by the following:

Temporary loans

Project funding


Facility for issuing notes

iv) Products and Services

At Access Bank, there is a wide range of products and services designed to provide value-added banking solutions ranging from day-to-day transactional banking to complex financing structures, to assist customers in obtaining liquidity, strong finding reduced capital costs, and stronger balance sheets.

Other services available include:

Money management

This is accomplished by;

Bank collecting services are available.

Use the Bank Payment Solution

Bank access in liquidity management solutions

Bank access in correspondent banking services

Get access to banking information solutions.

Banking through the internet

Access Bank offers consumers simple and convenient options to conduct financial transactions from the comfort of their homes and businesses.

vi) Financing for Working Capital

Customers of Access Bank can choose from a variety of working capital finance options to satisfy their short-term funding needs. The above services are available through the following channels:

Drawing on uncashed bank checks

Overdraft protection

Credit lines that are revolving

Discounting of invoices

Plans for distributor credit

Finance for trade

In addition, leases

Access Bank’s Historical Background

Access Bank was founded on February 8, 1989 as a privately held commercial bank. It got a banking licence in December 1988 and began operations on May 11, 1989. On December 24, 1998, the bank was transformed to a public limited liability company, and on November 18, 1998, it was listed on the Nigerian Stock Exchange.

Access Bank was successfully recapitalized in December 2001, and the bank’s board of directors hired the present senior management team with the explicit objective to reposition the bank as one of Nigeria’s top five (5) banks by 2007.

Since the current team of Mr. Aigboje Aig-Imoukhede (MD/CEO) and Mr. Herbert Wigwe (Deputy MD) took over, the bank has seen a sea change in all aspects of its business.

The new Access Bank is ideally positioned to become Nigeria’s premier provider of financial services by exceeding its clients’ expectations and assisting them in managing their businesses more effectively.

i) Professionalism

Access Bank provides universal services to corporate, commercial, and individual customers. The bank’s pre-tax profits for the 2002/2008 fiscal year exceeded the bank’s total cremelative profits since its founding in the first year of its five-year transformation programme.

Access bank shares were the most actively traded stocks on the Nigerian stock exchange in 2008, among other reasons, and the bank was named “Bank of the Year 2008” by This Day News Paper.

The bank maintained its excellent performance in the 2008/2009 fiscal years, rising to fifth in terms of total assets from 65th in 2001. The Global Credit grade Company (GCR) awarded the bank a “A” grade in honour of its exceptional operating performance.

ii) Technological advancements

Success in the highly competitive financial services business frequently hinges on how quickly an organisation responds to opportunities and market developments as and when they arise.

Access Bank was the first Nigerian bank to use the Flexcube Banking Application to support its banking operations in October 1999. Flexcube is an all-in-one product package for universal banking.

Flexcube has changed throughout time in response to developments in the global financial landscape. The most recent version is Flexcube 6.2, which is described as “a cutting-edge universal banking solution.”

Consistent with the bank’s commitment to provide customers with world-class banking, and following an exhaustive due diligence study by KPMG international, the bank made the brave choice to upgrade its existing Flexcube application to the latest version 6.2, a browser-enabled version.

Access Bank is the first bank in Africa to deploy the latest version of Flexcube, and the second most advanced Flexcube user in the world, behind one of India’s largest banks, Syndicate Bank. As a result, the bank just awarded the Hewlett Packard Award for the finest deployment of a core banking infrastructure in West Africa.

iv) Value-added Services

The bank defines value as the ability of its goods and services to generate cost savings to its customers. The bank’s board established an internal audit charter throughout the year. The charter isolates and insulates the Internal Audit Department from the Executive Management’s control or influence,

as well as frees staff within the Internal Audit unit from operational and management responsibilities that could impair their ability to conduct independent reviews of all aspects of the bank’s operations, thereby making the department independent.

v) Financial Statement

The financial summary presented below is based on the reporting accountants’ report on Access Bank’s profit forecast for the years ending 31st December, 2005, 2006, and 2007, assuming the offer is fully subscribed, and the reporting accountants’ report on Access Bank’s audited financial statements for each of the five years ending 31st December, 2009.

PBT stands for Profit Before Tax.

The bank’s PBT for the fiscal year ending December 31, 2009 was N952 million, a 17% increase over the previous year’s PBT of N811 million. For the fiscal years ending December 31, 2005, 2006, and 2007, the bank’s PBT is predicted to be N2.02 billion, N4.89 billion, and N7.85 billion, respectively.

After-Tax Profit (PAT)

PAT for the fiscal year ended December 31st, or enhance their potential to earn more revenues. The bank has organised a number of industry events to help current and potential clients learn about best practises, exchange their experiences with peers, and freely connect with regulators and policymakers. These encounters have had a substantial positive influence on the business of our customers.

In addition, the bank worked with the Nigerian Maritime Authority to create a functional framework for implementing the recently approved sabotage legislation. Local shipping businesses,

which will benefit from this legislation, have acknowledged that the implementation framework fully covers the operational and finance concerns that the bill seeks to address.

The bank recruited a local software development business to create “cliuc,” a software application that allows consumers to reconcile their bank statements in seconds at a significant financial cost to the bank.

This software is not only available to clients, but it is also free of charge, and the bank bears the expense of installation and employee training.

(iv) Corporate Governance

Access Bank has adopted the highest corporate governance and best practises standards. In keeping with the bank’s commitment to maintaining the highest standards and ensuring the independence of internal audit, the 2005, 2006, and 2007 budgets are expected to be N1.56 billion, N3.76 billion, and N6.05 billion, respectively.

Profit after tax 8.0

(N’b) (N’b)

6 6.0

4 4.0

Profit before Tax 2.0


0 0.0

2000 2001 2002 2008 2009 2005 2006 2007

E = Estimates based on Access Bank’s earnings projections for the years

Ending on December 31, 2005, 2006, and 2007.

Overall Assets

Access Bank’s total assets amounted at 31.34 billion as of December 31, 2009, marking a 39% increase over the previous year’s total assets of N22.58 billion.

v) Securities

The bank’s authorised share capital is now N6 billion, consisting of 12 billion ordinary shares of N50,000 each, while its issued and paid up share capital is N2 billion, consisting of 4 billion ordinary shares of N50,000 each.

vii) National Distribution

The head office of Access Bank is located at Plot 1665 Oyin Jolaefemi Street, Victoria Island, Lagos, Nigeria’s commercial metropolis. Access Bank operates around 118 bank locations in Nigeria’s major commercial centres.

The Managing Director of the bank reports to the Chairman of the Board of Directors and is responsible for the general operation of the bank.

The bank’s current Board of Directors is made up of permanent Nigerians, as shown below.

1. Mr. Aigboje Aig – Imoukhuede – Chairman of the Board

2. Mr Herbert Wigwe – Deputy Managing Director

3. Mr. Taukeme Edwin Koroye is the Executive Director of OPS.

4. HRH Oba Shafi Sule is a Non-Executive Director at the World Bank.

5. Dr. Cosmos Maduka is a Non-Executive Director of the University of Nairobi.

6. Mr. Gbenga Oyeb ode MFR – A Non-Executive Director

7. Mr. Adekunle Disu, Non-Executive Director

8. Mr. Oritsedere Samuel Otubu – Non-Executive Director

Problems and Solutions

(a) The uncertainty caused by some financial institutions’ lack of a strong asset base and the lack of political stability in the country since 1993 has had a negative impact on the nation’s economic performance; the effect of the above has led to wealthy individuals’ unwillingness to invest their money,

as well as the massive movement of people and goods from one geographical zone to another in the country due to political, sectarian, and religious crises, t

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