DEBT MANAGEMENT IN COMMERCIAL BANKS: A CASE STUDY OF HABIB NIGERIA BANK LIMITED
DEBT MANAGEMENT IN COMMERCIAL BANKS: A CASE STUDY OF HABIB NIGERIA BANK LIMITED
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Date
1992-12
Authors
OLONISAKIN, COMFORT FOLAKE
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Abstract
ABSTRACT
The increasing competition in the Nigerian banking
industry necessitates that banks take on higher degree of
risks than they are hitherto accustomed to; but the degree
of risk inherent in a bank's lending portfolio has serious
implications for the bank's earnings and earning assets,
and subsequently for its liquidity, profitability and
capital.
The problem with which this study was concerned is
that of identifying the causes of bad debts in commercial
banks using Habib Nigeria Bank Limited as a case study
Effects of factors such as economic recession, non-prudent
financial management, natural disaster, prevailing economic
situations on debts management were considered.
The objective of the work was to study the process
of credit appraisal, identify the major causes of bad and
doubtful debts, analyse their effects and offer suggestions
on minimization and effective management of bad debts in
commercial banks.
Consequently, four hypotheses were stated for testing
at 5 per cent level of significance. These are:
1. That the state of the economy does not significantly
affect the incidence of bad debts.
2. That prudent financial management does not
significantly affect the incidence of bad debts.
(viii)
3. That the establishment of effective loan policy
does not make any significant difference to the
occurrence of bad debts.
4. That stall qualifications do not make any
significant difference to the occurrence of bad
debts.
The study population was made up of fifty officers
from the credit departments of the bank from ten branch
offices. The instrument used for data collection was
the questionnaire, and the data was subjected to chi-square
test.
As a result of the analysis of data, the research
study discovered that factors such as, Economic recession,
Government Monetary policy, Excess gearing, Under Capitalization
etc., could cause bad debts in banks.
The implication of these findings for debt management
in commercial banks is enormous. It implies that the
of the economy, staff qualifications, prudent financial
management and establishment of effective loan policy does
have a significant effect on the incidence of bad debts
Description
A PROJECT SUBMITTED TO THE POST-GRADUATE SCHOOL,
AHMADU BELLO UNIVERSITY, ZARIA
IN PARTIAL FULFILMENT FOR THE AWARD OF THE DEGREE
MASTER OF BUSINESS ADMINISTRATION. (M.B.A)
Keywords
DEBT, MANAGEMENT, COMMERCIAL BANKS, HABIB NIGERIA BANK LIMITED