A CRITICAL ASSESSMENT OF THE SURVIVAL STRATEGIES OF DEPOSIT MONEY BANKS IN A DEPRESSED ECONOMY WITH SPECIAL REFERENCE TO THE FIRST BANK OF NIGERIA PLC

ABSTRACT

Banking is in the midst of change that has arisen due to economic depression. As government seek to improve economic efficiency and better allocation of resources to solve the problem of economic depression, policy makers are shifting towards openness, competitiveness and market discipline.

In response to the developments, Deposit Money Banks in Nigeria engaged in financial sanitizing, management strengthening, corporate refocusing, Business Process Reengineering BPR, mergers and acquisitions in order to survive the depressed economy. This whole process is called survival strategies through corporate restructurings.

The writer made efforts to discuss issues, facts and environmental factors surrounding the wave of deposit money banks survival in a depressed economy like Nigeria.

TABLE OF CONTENTS

Title Page i

Approval Page ii

Certification Page iii

Dedication iv

Acknowledgement v

Abstract vii

Table of Contents viii

CHAPTER ONE: INTRODUCTION

1.1 Background of the Study 1

1.2 Statement of the Problem 9

1.3 Objectives of the Study 11

1.4 Research Questions 12

1.5 Scope of the Study 12

1.6 Significance of the Study 13

1.7 Limitations of the Study 14

1.8 Definition of Terms 15

CHAPTER TWO:

2.0 Review of Related Literature 1

2.1 Issues in Bank Survival 17

2.2 An Overview of the Operating Environment for Nigerian Deposit Money Banks 19

2.2.1 The MacroEconomic Environment 20

2.2.2 Industry Environment 29

2.2.3 The Regulatory Environment/Legal Framework 32

2.3 The Business Process ReEngineering BPR Option 35

2.3.1 Origin and Meaning of the BPR Concept 35

2.3.2 Fundamental Breakthrough Required for Reengineering Services in Banks 36

2.3.3 Key and Methodology for Carrying Out a BPR Project in Banks 42

2.3.4 The Role of BPR in the Survival and Sanitizing of the Nigerian Deposit Money Banks 47

2.3.5 Positive Effects of BPR To the Banking Sector 50

2.4 The Merger and Acquisition Option 52

2.4.1 Meaning of the Concept Merger and Acquisition 52

2.4.2 Legal Issues in Merger and Acquisition 55

2.5 Synergy: An Efficiency Indicator in Bank Sanitizing 56

2.6 Nature of Deposit Money Bank in Nigeria 59

2.7 A Historical Overview of First Bank of Nigeria Plc 60

2.8 Depressed Economy 62

2.8.1 Causes of Economic Depression 63

CHAPTER THREE:

3.0 Research Methodology 65

3.1 Research Method 65

3.2 Determination of Population size of the Study 65

3.3 Determination of Sample size 67

3.4 Method of Data Collection 68

3.5 Method of Data Analysis/Interpretations 69

CHAPTER FOUR

4.0 Data Presentation and Analysis 71

4.1 Financial Statement of First Bank Plc for the Month ended 31st March 71

4.2 Analysis of Total Assets 73

4.3 Analysis of Total Deposits 77

4.4 Analysis of Loans and Advances 80

4.5 Analysis of Profit Before Tax 86

4.6 Analysis of Shareholders Funds 89

CHAPTER FIVE

5.0 Summary, Conclusion and Recommendation 93

5.1 Summary 93

5.1.1 Total Assets 93

5.1.2 Total Deposits 93

5.1.3 Loans and Advances 94

5.1.4 Profit Before Tax PBT 95

5.1.5 Shareholders Funds 95

5.2 Conclusion 96

5.3 Recommendation 96

Bibliography