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IMPACT OF LIQUIDITY AND PROFITABILITY AS A SURVIVAL STRATEGY FOR BANKS IN NIGERIA

  • Type:Project
  • Chapters:5
  • Pages:58
  • Methodology:OLS Method
  • Reference:YES
  • Format:Microsoft Word
(Accounting Project Topics & Materials)
IMPACT OF LIQUIDITY AND PROFITABILITY AS A SURVIVAL STRATEGY FOR BANKS IN NIGERIA
ABSTRACT
This study investigates the impact of Liquidity and profitability as a survival strategy for banks in Nigeria and selected Skye bank of Nigeria PLC as the case study. It evaluates the relevance of Liquidity and profitability in the banking industry and how it is managed. It also laid emphasis on risk associated with banking business and how is been managed. The task of assets and Liabilities committee of the bank, relationship between Liquidity and profitability, causes of Liquidity and non-profitability. Roles of regulatory authority in banking supervision in Nigeria and the specified liquid assets for financial institution in Nigeria and the specified liquid assets for financial institutions in general.
In achieving the afore mention facts, secondary source was used to gather data, specifically, financial statement, textbooks, past related project and international network (internet) and journals was used to collect a valued and reliable information of the bank for the project to provide the basis for proper understanding of the impact of liquidity and profitability as an aspect of assets and liabilities management in the administration of universal bank in Nigeria.
CHAPTER ONE
1.0 INTRODUCTION
1.1 GENERAL OVERVIEW
1.2 OBJECTIVE OF THE STUDY
1.3 STATEMENT OF PROBLEM
1.4 RESEARCH QUESTIONS
1.5 SIGNIFICANCE OF THE STUDY
1.6 SCOPE AND LIMITATION OF THE STUDY
1.7 DEFINITION OF OPERATIONAL TERMS
1.8 Limitations of the Study
CHAPTER TWO
2.1 LITERATURE REVIEW
2.2 Theoretical Review
2.3 Determinants of Commercial Banks survival
2.4 Empirical Review
2.5 Conceptual Framework
CHAPTER THREE
RESEARCH METHODOLOGY
3.1 Research Design
3.2 Population
3.3 Data Collection
3.4 Diagnostic Tests
3.5 Data Analysis
CHAPTER FOUR
DATA ANALYSIS, RESULTS AND DISCUSSION
4.4 Interpretation of the Findings
CHAPTER FIVE
SUMMARY CONCLUSIONS AND RECOMMENDATIONS
5.1 Summary
5.2 Conclusion
5.3 Recommendations for Policy and Practice
REFERENCES
CHAPTER ONE
1.0 INTRODUCTION
1.1 GENERAL OVERVIEW
Banks are engaged in essential activates, which entail balancing their liabilities with the assets composition of the balance sheet in order to maintain equilibrium.
No doubt the core business of banking, which is credit, involves from the surplus unit of the economy and channel the funds soured to the deficit unit according.
The deposit is mobilized at a cost of the bank and this cost is often called interest. The deposit is channeled to the users who pay interest at higher rate than the deposit rate.
The primary objective of the bank is to make profit which is the difference between the cost of deposit and other cost and the income form credit advance and other investment. This pre supposed that a bank must ensure proper management of its assets and liability has, both in composition and utilization in this way the highest return is ushered in for all stakeholders in the business. It is true that the lips service paid to assets and liabilities management in the banking debacle of the 1980's hence it is important to work hard in order to avoid the fails of the past and restore confidence in the industry.
The impact of the regulations and the mode of insurance have been adduced by scholars as playing significant role in banks. Liquidity crisis of the 1980's specifically, the critics point at the central bank of Nigeria's directive to the bank to lodge the naira equivalent of foreign exchange requests, the withdrawal of public sector deposit from bank as some of the factors that engendered the bank failure. To a large extent, the situation revealed the fragile liquidity positions of Nigeria banks notwithstanding the contributory role of central bank of Nigeria guidelines and directive.
One important issue of note is that in the pursuit of profit maximization objectives, bank must endear to balance credit extension push and liquidity management in such a way that bank safety is not jeopardized.
1.2 OBJECTIVE OF THE STUDY
This study seeks to achieve the following objectives.
    To examine how banks establish, maintains and manage an optimum balance between Liquidity and profitability.
    To show the correlation between Liquidity and profitability
    To identify the basis for proper understanding of the impact of liquidity and profitability as an aspect of assets and liability management in the administration of deposit money bank.
    To show banks manage various risk associated with their operations.
    To reveal the specified liquid assets for financial institution and the degree of their liquidity and profitability.
1.3   STATEMENT OF PROBLEM
This research work tend to address or examine the impact of liquidity and profitability as a survival tool for banks in Nigeria visa-vis the maximization of the cost of liquidity and maximization of profits to ensure bank’s solvency in Nigeria
1.4   RESEARCH QUESTIONS
    How do banks establish, maintain and manage an optimum balance between Liquidity and profitability?
    What is the correlation between Liquidity and profitability?
    What are the basis for proper understanding of the impact of liquidity and profitability as an aspect of assets and liability management in the administration of deposit money bank?
1.5   SIGNIFICANCE OF THE STUDY
The significance of this study is to provide the basis for proper understanding of the impact of liquidity and profitability as a survival strategy for the banks in Nigeria and as an aspect of assets and liabilities management in the administration of deposit money banks and people in general and banks will know the prudent ways in which their resources can be managed and economy as a whole will be positively affected in various ways.
1.6   SCOPE AND LIMITATION OF THE STUDY
The scope of this study is limited to the analysis, interpretation and manipulation of the information provided in the financial statement and manipulation of the information provided solutions to the problem unveiled in the research problem. The scope was expanded to how Nigerian banks manage their liquid assets to maximize profit.
Financial statement by their nature only shows the aspect of the business that can be qualified in monetary terms. But business generally among which deposit money banks felt, have quantitative among which deposit money bank felt, have quantitative aspects that cannot be qualified monetary, but they affect positively or negatively the performance of the business. The example is the effects of the retrenchment of some worker would have on the moral of other workers and boost their efficiency and productivity.
The effect on the efficiency and production directly or indirectly affect the performance of the performance of the business but there can hardly be quantified and induced in the financial statements.
Besides, bank operate in a very keen competitive environment in fact makes it to be reluctant in giving out financial and other information due to fear of playing into their competitors hand.
1.7   DEFINITION OF OPERATIONAL TERMS
    Liquidity: This is the availability of bank to meet sudden withdrawal demand or request for loan by borrowing customer.
    Profitability: Is the ability of a bank to earn positive net return on its investment over a long period of time
    Solvency: Is the investment in asset that will be ready to mature at the time the long them obligations of bank are due for settlement.
    Deposit: This is the money kept with the bank by customer which is the major source of fund, accounting for over 60% of what a bank needed to finance its lending operation.
    Loan and advances: These are funds granted to loan seeking customers to meet there demand in which interest will be paid on it to the bank.
    Market risk: This is the possibility that market will move against an operator in terms of change in interest or exchange rate and therefore result in either potential loss of income or utilization of funds below the optimum level.
    Cash: This is the fund held by bank to meet its daily obligation most especially customers withdrawals.
    Asset: Asset are owned by bank.
1.8       Limitations of the Study
During process of doing this research, we encountered a lot of issues which hindered us in conducting the research efficiently. The financial statement of Skye bank was not available in time to be included. The study was done in Nigeria and therefore the results may relevant to states because the operating environment is different. The period of study was not enough time to draw unequivocal conclusion.


IMPACT OF LIQUIDITY AND PROFITABILITY AS A SURVIVAL STRATEGY FOR BANKS IN NIGERIA

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Details

Type Project
Department Accounting
Project ID ACC0614
Price ₦3,000 ($9)
Chapters 5 Chapters
No of Pages 58 Pages
Methodology OLS Method
Reference YES
Format Microsoft Word

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    Details

    Type Project
    Department Accounting
    Project ID ACC0614
    Price ₦3,000 ($9)
    Chapters 5 Chapters
    No of Pages 58 Pages
    Methodology OLS Method
    Reference YES
    Format Microsoft Word

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