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MARKET INTEREST RATES AND COMMERCIAL BANK PROFITABILITY: (A CASE STUDY OF FIRST BANK OF NIGERIA PLC (2000 – 2004)

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(Marketing Project Topics & Materials)
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
The Commercial Bank System shares a very important characteristic with other members of the financial sector and the rest of the business community; the desire to maximize profits and expand its share of the market.  Commercial banks are profit-making enterprises and as such they share with other businesses the same set of expectations concerning the health of the economy.

Banks act as financial intermediaries collecting deposits from one group and lending it out to another group.  In this role they are able to convert short-term deposits into long-term loans.  They bring together people who have money to lend and people who need money.  They banks thus act as intermediaries collecting deposits and paying interest on them and making loans and charging interest on the loans made to their customers.

It will be observed that interest is the key element in the performance of this intermediation function of the commercial bank.  At high interest rates the cost of borrowing will be increased and prospective borrowers will shy away from borrowing only to show up when the interests are down.

In periods of economic upturn, commercial banks add to the money stock and thereby help to expand the demand for goods and services.  However, once the economy arrives at full employment of workers and resources, a continued expansion of loans and deposits simply add to the price level increase.

On the other hand, if banks contract loans in periods of mild economic decline experts hold that there is not likely to be a drop in the price level.  Thus banks share the general business outlook on economic conditions.  Commercial banks in the absence of regulations tend to intensify whatever phase of the business cycle is current.  This, they do through their ability to create and destroy money when making loans and investments.

Klein stated that banks have a responsibility that transcends that of other business enterprises.  They are responsible for the creation, destruction and administration of our economy.  As a consequence, hey are also responsible to great extent for the welfare of the economy.

This dual responsibility to itself as a business enterprise and to the nation puts a tremendous burden on the individual commercial bank if it acts in the national interest it may hurt its competitive positive.  If its lending policy is conservative during periods of prosperity and full employment, it reduces its potential profits since banking business in Nigeria and to evaluate their effect on bank profitability.

The banker is faced with the problem of maintaining a balance between solvency, liquidity and profitability.  Consequently, the commercial bank’s major and immediate challenge is how to manipulate the economic variables in order to ensure an optimum balance between solvency, liquidity and profitability.

The commercial banks can also be distinguished form other financial institutions primarily because of the difference in nature of their deposits liabilities and corresponding differences in the characteristics of their assets.  One unique feature of the commercial bank is that they have short term, highly volatile deposit and liabilities.  That would be useful as money in the normal run of event.  They have a greater potential for credit creation more than other financial institutions.  Since they exist to serve human needs which arrives from environmental condition to stimulate economic activities to maximize profits and provide adequate liquidity level in the system.

It is in compliance with the above issues that First Bank of Nigeria Plc is being used as a typical example to emphasize.


TABLE OF CONTENTS
Cover page
Title page
Approval page
Dedication
Acknowledgement
Table of content
List of tables
List of charts/graphs

CHAPTER ONE: 
INTRODUCTION
1.1 Background of the study
1.2 Statement of the study
1.3 Objective of the study
1.4 Scope of the study
1.5 Significance of study
1.6 Research hypothesis
1.7 Definition of terms

CHAPTER TWO: 
LITERATURE REVIEW
2.1 Nature of commercial bank in Nigeria
2.2 Historical background of first bank of Nigeria plc.
2.3 Theories of interest rates determination.
2.4 The importance of commercial bank
2.5 Profitability and liquidity of commercial bank
2.6 Factors affecting bank profitability
2.7 Market interest rates versus commercial bank profitability
2.8 Financial ratio
2.9 Limitation of the financial ratio

CHAPTER THREE: 
RESEARCH METHODOLOGY
3.1 Research design
3.2 Sample selection
3.3 Data collection 
3.4 Data collection techniques
3.5 Problem of data collection

CHAPTER FOUR
ANALYSIS OF DATA
4.1 Analysis of first bank financial statement
4.2 Accounting policies of the First Bank Plc.
4.3 Balance sheet
4.4 Analysis of management efficiency
4.5 Discussion of findings
4.6 Test of hypothesis

CHAPTER FIVE:
SUMMARY OF FINDINGS, CONCLUSION AND  
RECOMMENDATION
5.1 Summary
5.2 Conclusion
5.3 Recommendations




MARKET INTEREST RATES AND COMMERCIAL BANK PROFITABILITY: (A CASE STUDY OF FIRST BANK OF NIGERIA PLC (2000 – 2004)

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Details

Type Project
Department Marketing
Project ID MKT0956
Price ₦3,000 ($9)
No of Pages 119 Pages
Format Microsoft Word

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    Details

    Type Project
    Department Marketing
    Project ID MKT0956
    Price ₦3,000 ($9)
    No of Pages 119 Pages
    Format Microsoft Word

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