ASSESSMENT OF PERFORMANCE OF NIGERIAN BANKS: A STUDY OF SELECTED BANKS
ASSESSMENT OF PERFORMANCE OF NIGERIAN BANKS: A STUDY OF SELECTED BANKS
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Date
1998-12
Authors
MORU, MUSA ONIVEHU
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Abstract
ABSTRACT
This research focuses on the performance assessment of Nigerian Banks. To
achieve this objective five Banks are selected for a detailed performance - analysis.
They are Union Bank, WEMA Bank, United Bank for Africa (UBA), Lion Bank and
Savannah Bank.
The research problem is the apparent wide-spread incidence of financial
distress in the banking industry in Nigeria which has led to the withdrawal of the
licences of twenty-six banks (thirteen each of the commercial and Merchant Bank(s).
The assessment is carried out through the application of the known financial - risk
indices with a view to highlighting the efficiency of the various aspects of the
operation of the selected Banks. To this end Osaze's version of the Discriminant
Analysis models which is more relevant to the situation of the developing countries
like Nigeria, is used to assess the selected banks in this study.
The study reviews some of the previous researches on bank performance. It is
pointed out in the literature review that there appears to be only one published
research on Bank performance in Nigeria as at the time of this study. This study was
carried out by Adekanye (1989), Appendix A Pg. 105. Also, the criteria used by the
regulating authorities in Nigeria and America to assess Bank performance are
discussed.
The study examines certain variables that appear to influence Bank
performance in Nigeria. These include influence by government through ownership of
shares, issuance and frequent changes in financial policies via regulation and
deregulation of the interest and exchange rates.
The main source of data in this study is the Bank's financial statements
covering the five-year period (1990-1994). Other sources include extracts from the
print media. They form the appendices in this study.
It is expected that the investors will find this study a useful material that could
help to reduce their errors of judgement when choosing companies for investment. By
highlighting the defects in the use of the Capital/Asset ratio for identifying problem
Banks and by identifying a more efficient alternative, the bank examiners are most
likely to find this study an easy basis for predicting bank failure.
Since the available records show that not much study has been conducted in the area
of bank performance in Nigeria, it is expected that this study will increase the frontier
of knowledge in bank performance assessment.
Description
DEPARTMENT OF ACCOUNTING
FACULTY OF AMINISTRATION
AHMADU BELLO UNIVERSITY,
ZARIA, NIGERIA
Keywords
ASSESSMENT,, PERFORMANCE,, NIGERIAN,, BANKS:, STUDY,, BANKS