ProjectClue.com WhatsApp or Call Us

projectclue whatsapp icon07030248044

Project Topic:

Merger and acquisition strategy for growth, improved performance and survival in the financial sector (a study of Sterling bank, Access bank and Eco bank)

Project Information:

 Format: MS WORD ::   Chapters: 1 - 5 ::   Pages: 55 ::   Attributes: Questionnaire, Data Analysis, Abstract  ::   1,838 people found this useful

Project Department:

BANKING FINANCE UNDERGRADUATE PROJECT TOPICS, RESEARCH WORKS AND MATERIALS

Project Body:

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

The relevance of banks in the economy of any nation cannot be overemphasized. They are the cornerstones of the economy of a country. The economies of all market-oriented nations depend on the efficient operation of complex and delicately balance systems of money and credit (Bauer, 2009).

Banks are an indispensable element in these systems. They provide the bulk of the money supply as well as the primary means of facilitating the flow of credit. Consequently, the economic well being of a nation is a function of advancement and development of her banking industry (Obadan, 2007).

The financial deregulation in Nigeria that started in1986 and the associated financial innovations have generated an unprecedented degree of competition in the banking industry. The deregulation initially pivoted powerful incentives for the expansion of both size and number of banking and non-banking institutions (Chatterjee, 2006).

The consequent phenomenal increase in the number of banking and non-banking institutions providing financial services led to increased competition amongst various banking institutions, and between banks and non-banking financial intermediaries.

Banks play a crucial role in propelling the entire economy of any nation, of which there is need to reposition it for efficient financial performance through a reform process geared towards forestalling bank distress.

In Nigeria, the banking sector is part and parcel of the government strategic agenda aimed at repositioning and integrating the Nigerian banking sector into the African regional and global financial system in order to make the Nigerian banking sector sound, the sector has undergone remarkable changes over the years in terms of the number of institutions, structure of ownership, as well as depth and breadth of operations (Akpan 2007).  These changes have been influenced mostly by the challenges posed by deregulation of the financial sector, operations globalization, technological innovations, and implementation of supervisory and prudential requirements that conform to international Soludo (2004) opined that, the Central Bank of Nigeria(CBN) chose to begin the Nigerian banking sector reforms process with the consolidation and recapitalization policy through mergers and acquisitions. This is done in order to arrest systems decay, restoration of public confidence, building of strong, competent and competitive players in the global arena, ensuring longevity and higher returns to investors considering the regulations and standards.

Inability of most Nigerian banks to perform well due to operational hardship, expansion bottlenecks as a result of heavy fixed and operating costs coupled with volatility between deposits and lending rates, the present banking sector reforms in Nigeria was announced by Chukwuma Soludo, the then CBN governor on July 6th, 2004 with the objective of creating a sound and more secure banking system that depositors can trust through mergers and acquisitions which enhanced operational capital base. These and many more, act as a springboard to achieving improved efficiency. However, this research work will examine effect of merger and acquisitions on the performance and growth of financial sector.

1.2 Statement of the Problem

The Nigerian banking system has undergone remarkable changes over the years in terms of the number of institutions, ownership structure as well as development of the grassroots area. The changes have been influenced by challenges posed by deregulation of the financial sector, globalization, technological innovation and adoption of supervisory and prudential requirements that conform to international standard (Adeniyi 2010).

The recent incident of bank mergers and acquisitions in Nigeria is attracting much attention, partly because of heightened interest in what motivates firms to merge and how merger and acquisition affects performance or efficiency as well as banks output. The banking system has also been plagues by sharp practices, fraud and forgeries especially by in-house managers and other connected person.

However, the vital importance of merger on the performance of banking industry has not been fully explored thereby creating a research gap in this area. Hence, this research work will examine effect of merger and acquisitions on the performance and growth of financial sector.

1.3 Objectives of the Study

The general objective of this research work is to examine the effect of merger and acquisitions on the performance and growth of financial sector. However the specific objectives are;

  1. To examine if there is a significant difference in the pre and post mergers and acquisitions periods of banks in terms of gross earnings.
  2. To examine if there is a significant difference in the pre and post mergers and acquisitions periods of banks in terms of profits after tax.
  3. To examine if there is a significant difference in the pre and post mergers and acquisitions periods of banks in terms of net asset.

1.4 Research Questions

The research questions that are relevant to this study are state below:

(i)         Is there a significant difference in the pre and post mergers and acquisitions periods of banks in terms of gross earnings?

(ii)       Is there a significant difference in the pre and post mergers and acquisitions periods of banks in terms of profits after tax?

(iii)      Is there a significant difference in the pre and post mergers and acquisitions periods of banks in terms of net asset?

1.5 Research Hypotheses

The hypotheses that were tested in the course of this research are stated below:-

Hypothesis 1

Ho: There is no significant difference in the pre and post mergers and acquisitions periods of banks in terms of gross earnings.

H1: There is a significant difference in the pre and post mergers and acquisitions periods of banks in terms of gross earnings.

Hypothesis 2

Ho: There is no significant difference in the pre and post mergers and acquisitions periods of banks in terms of profits after tax.

Hi: There is a significant difference in the pre and post mergers and acquisitions periods of banks in terms of profits after tax.

Hypothesis 3

Ho: There is no significant difference in the pre and post mergers and acquisitions periods of banks in terms of net asset.

Hi: There is a significant difference in the pre and post mergers and acquisitions periods of banks in terms of net asset.

1.6 Significance of the Study

The significance of the study is to give enlightenment on the effect of merger and acquisitions on the performance and growth of financial sector and also to justify the merger and acquisition exercise as directed by the CBN and its effect on the economy as a whole. Stakeholders and general public will benefited from the research work. Moreso, Academics and students will appreciate the usage of this research as part of their reference material.

1.7 Scope and Limitation of the Study

The subject matter of the study was limited to a period of 8 years (2005-2012). The period  is important  in order  to derive  more  realistic   conclusion  and recommendations while  the  study  will also  be constrained  by the time  among others.

1.8. Definition of Terms

Merger: This is a situation where two or more independent companies combine to form a new company.

Acquisition: This is where one company takes over the control of another company by buying all the shares or sufficient shares to enable them have controlling power in the company.

Consolidation: viewed as the reduction in the number of banks and other deposit taking institutions with a simultaneous increase in size and concentration of the consolidated entitles in the sector (BIS, 2001)

Strategy: According to Onwuchekwa, (2009) strategy is an integrated plan through which a business organization accomplishes its objective, or rather as an overall response of a business organization over its environment.

Reform: Predicated upon the need for reorientation and repositioning of an existing status quo in order to attaining an effective and efficient state.

C.A.M.E.L It is a parameter used in accessing the health of banks where C stands for capital adequacy, A stands for Asset quality, M stands for Management and staff, E stands for Earning and profitability, L stands for Liquidity and fund management. 

Capital Base: It is paid up capital and reserved unimpaired losses.

Capitalization: Provision of money needed by company to function effectively and efficiently.

Central Bank of Nigeria (CBN): It is the apex bank in Nigeria banking sector or industry that represent the government of the country and also act as the banker to the government in the area of financing, advertising on monetary policies and implementation.

C.T.C Certified True Copy

Distressed Bank: These are banks that are unable to meet its obligation, both in the society and to their depositors.

Due Diligence: This is a phrase in merger and acquisition prices where parties explore the risk inherent in purchasing or merging will another company.

F.S.A.P: Financial Sector Assessment Programme

Memorandum of Understanding (MOU): It is an undertaking by the parties top the pre-merger arrangement or programme

Get the complete project »


Instant Share On Social Media:


Can't find what you are looking for?
Call (+234) 07030248044.

OTHER SIMILAR BANKING FINANCE PROJECTS AND MATERIALS

A CRITICAL ANALYSIS OF CAUSES AND PROBLEM OF FINANCIAL DISTRESS IN NIGERIA BANKING SECTOR (A CASE STUDY OF AFEX BANK PLC.)

 Format: MS WORD ::   Chapters: 1 - 5 ::   Pages: 68 ::   Attributes: Questionnaire, Data Analysis,Abstract

CHAPTER ONE INTRODUCTION The importance of capital as a necessity though not sufficient condition for economic growth is recognized in development economy where it is believed that the position of ...Continue reading »

A CRITICAL ANALYSIS OF THE USE OF FINANCIAL REPORT IN ASSESSING BANK PERFORMANCE. (A CASE STUDY UNION BANK OF NIGERIA PLC)

 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 72 ::   Attributes: Questionnaire, Data Analysis,Abstract  ::   5107 engagements

CHAPTER ONE INTRUDUCTION BACKGROUND OF STUDY A farmer, who plants corps, expects result, similarly to student who sits for examination expects results. The same 5 also true of an investor. For the ...Continue reading »

A CRITICAL ANALYSIS ON THE USE OF FINANCIAL STATEMENTS IN ASSESSING THE PERFORMANCE OF AN ORGANIZATION (A CASE STUDY OF FIRST BANK NIGERIA)

 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 72 ::   Attributes: Questionnaire, Data Analysis  ::   18288 engagements

ABSTRACT This project work is carried out to examine the contribution of micro finance banks to the development of Small and medium scale enterprises in Nigeria. The Brass micro finance bank is used a...Continue reading »

A CRITICAL APPRAISAL OF CURRENT ASSETS MANAGEMENT IN PUBLIC LIMITED LIABILITY COMPANIES

 Format: MS WORD ::   Chapters: 1 - 5  ::   Pages: 80 ::   Attributes: Questionnaire, Data Analysis,Abstract  ::   3640 engagements

ABSTRACT This project examined the management of current assets in public Limited Liability Company. It is obvious that no company can perform well without good current asset management. This cares f...Continue reading »

A CRITICAL APPRAISAL OF CURRENT ASSETS MANAGEMENT IN PUBLIC LIMITED LIABILITY COMPANIES

 Format: MS WORD ::   Chapters: 1 - 5 ::   Pages: 55 ::   Attributes: Questionnaire, Data Analysis, Abstract

CHAPTER ONE 1.0 INTRUDUCTION: Current assets as one of the management tolls of business organization are very important in the proper function of business and achievement of organizational goal. Cur...Continue reading »

A CRITICAL ASSESSMENT OF THE SURVIVAL STRATEGIES OF DEPOSIT MONEY BANKS IN A DEPRESSED ECONOMY

 Format: MS WORD ::   Chapters: 1 - 5 ::   Pages: 68 ::   Attributes: Questionnaire, Data Analysis,Abstract  ::   1808 engagements

CHAPTER ONE INTRODUCTION 1.1 BACKGROUND OF THE STUDY Nigerian economy is faced with national and global economic challenges and as such, the financial institutions, especially the banking sector ha...Continue reading »

What are looking for today?

WHAT OUR CUSTOMERS ARE SAYING:
  • 1. Abubakar Sani from Nigerian Investment Promotion Commission said "I had a wonderful experience using ProjectClue, they delivered not only on time, but the content had good quality. I recommend ProjectClue for any project research work.".
    Rating: Excellent
  • 2. Ogunniran Olawale from Ekiti state university said "Projectclue is really safe and reliable Quick access to project works Nice customer service Fast delivery of request Recommend this toy fellow students ".
    Rating: Excellent
  • 3. Fahat Nasir from isa kaita college of education dutsinma said "Fish farming a solution unemployment ".
    Rating: Very Good
  • 4. Ajimbi Oluwarotimi from Theology school osun said "Good ".
    Rating: Very Good
  • 5. Clement Abdullahi Ogiji from National Open University of Nigeria said "I am a living witness and have recommended project clue to a lot of students, so far none have been disappointed, very reliable and, trustworthy and dependable".
    Rating: Excellent
  • 6. Jhuee from Sultan national high school said "Good quality. I recommend project clue for any project research work.".
    Rating: Excellent