Debt Recovery Management And Its Effect On Profitability Index Of Banks (A Case Study Of Union Bank Nigeria Plc Ilorin)

Debt Recovery Management And Its Effect On Profitability Index Of Banks (A Case Study Of Union Bank Nigeria Plc Ilorin)
Table of Content
- Title page
- Certificate
- Dedication
- Acknowledgement
- Table of content
Chapter One
1.0 Introduction
- 1.1 Background of the study
- 1.2 Relevance of the study
- 1.3 Objective of the study
- 1.4 Statement of the problem
- 1.5 Limitations of the study
- 1.6 Definition of key terms and concept
- 1.7 Organization of the study
Chapter Two
2.0 Literature Review
- 2.1 Concept needed for debt
- 2.2 Setting the stage for successful
- 2.3 Strategies and sand technique for credit collection
- 2.4 Effective use of executive customer
- 2.5 Handing difficult customer
- 2.6 Information technology
- 2.7 Knowing your customer successfully (accessing qualitative management issue)
- 2.8 Time management
- 2.9 Cans flow statement as in relation to debt recovery
Chapter Three
3.0 Research Methodology
- 3.1 Area of study (Union Bank Plc)
- 3.2 Sources of data
- 3.3 Sampling methods
- 3.4 Method of data analysis
- 3.5 Limitation of the methodology
Chapter Four
4.0 Data Presentation, Analysis and Findings
- 4.1 Data presentation
- 4.2 Data analysis
- 4.3 Findings
Chapter Five
5.0 Summary, Conclusion and Recommendation
- 5.1 Summary
- 5.1 Conclusion
- 5.2 Recommendation
- References
Chapter One
1.0 Introduction
1.1 Background to the Study
Before the advert or existing of money, transaction was by “barter” this involve or direct exchange of goods for foods and service for services its shortcoming was that is involve a double incidence of wants.
And later compounded by indivisibility of certain goods and services.
The early bankers. The Jew in Lombard Street, Italy, transacted their business in the market place. The word “bank” itself is derived from Italian word “BANIO” meaning whenever a bank failed his bank will be broken up by the angry customer hence the “Bankruptcy” meaning insolvency i.e. on able to fulfill is financial obligation. Which is derived from the Italian word “BANKORUPTO” (Broken bench).
The Italian in Lombard later liquidated because they lend money to king which is not repay back this money. Then can the advent of goldsmith.
The goldsmith making in London began to expand their business through safe keeping og valuable and money when such valuable and money is deposited with the goldsmith receipt would be issued, as the business grows, the receipt is then intercharge of bank notes.
Then goldsmith realize that such money kept with them can be lent out to the third party through collection of interest. In order to secure deposits money and valuable, the British Governments establish the bank note.
The competition of business raised, excluding the bank which can trace the history to the sixteenth and seventeenth centuries.
Banking in Nigeria
In Nigeria the earlier activity was carried out by “Elder Depter” and company with the African banking corporation in 1982/1984.
The bank British West Africa took business is the sole bank in the country. Now call First Bank of Nigeria (Formally Standard Bank of Nigeria Limited), 1917 the colonial bank emancipated new bank called Union Bank of Nigeria Limited.
First indigenous bank was the industrial and Commercial Bank of 1929 but failed in 1930. Nigeria Mercantile Bank come on 1931 and founded in 1936 National Bank of Nigeria Limited was opened in 1933. The came in 1945. It was followed by African Continental Bank on 1945 (Tinubu Bank) sooner French and Brutish United later to become United Bank of Africa (UBA) in 1949.
Due to frequent collapse of bank and lost of depositors fund. The need for legislation to protest public fund arise the first banking or finance appeal lest in 1952 and ruled that all bank must operate through the issue of license from the government, the 1958 ordinance come, which establish the Central Bank of Nigeria, which took over the issue of note and regulation of monetary statutory.
Banking Act of 1969
Due to come structural and operational change banking industry.
The need for greater and better control.
The Banking of 2009
There are outstanding changes not yet made by the legislation.gov.uk editorial team to banking act 2009. These change will be listed when you open the content using the table of contents below. Any change that have already been made by the team appear in the content and are referenced with annotations.
Rural Banking Scheme
The CBN initiated by rural banking scheme whereby Commercial Bank where allocated 200 branches in the first phase. 226 branch in the second phase and 300 branch under the third phase. The scheme create awareness on the important of banking in the rural areas and,
- Central bank
- Commercial bank
- Merchant bank
- And specialized.
1.2 Relevance of the Study
The main purpose of the study is to English various management. On debt recovery technique and it effect on profitability in the country. It aims of establishing how find can be source invested regulated by invested through banking.
1.3 Objective of the Study
This study will be tremendous benefit to operator in banking industry as a debt manager whom will be expose to various of find to a bank and how this fund can be ideally utilized and retrieved from borrowers. Establish the bank note.
1.4 Statement of Problem
Every commercial enterprise arise of which bank and not exception, require fund either for expension long term or to finance investment in trade. The sufficient utilization of these funds in an important factors that determines the success or failure of the organization.
The problem associated with this needs is whose how and is what volume or quality will this fund be sought.
1.5 Limitation of the Study
The study cover various sources and utilization of debt available to a bank it will cover debt recovery management activity in Union Bank for a period of 5 years between 1996-2000.
Also the activities if treasure department relating to sourcing and utilization of debt in the bank (Union Bank will be examined).
1.6 Definition of Key Terms and Concept
Debt recovery:
A debt recovery person must combine many skill to be able to tackle numerous complex situations.
Management:
This is directing task of an organization resources to achieve organization goal. Function of manager are planning controlling motivation leading etc.
Profitability index:
Very important to financial institution like bank because it is and evidence of strength and progress. It also helps to generate confidence bank maximum revenue and minimize lot to make profit.
Bank:
A banker is a dealer in capital or dealer in money, he is an intermediate party between leader and borrows. He borrows and party and land to another.
1.7 Organization of the Study
- Chapter one compiles of introduction and statement of problem and background to the study.
- Chapter two comprises the literature review that carry out the introduction to the area project work.
- Chapter three consists of the area of study which is known as Union Bank of Nigeria Plc.
- Chapter four has the introduction and analysis and interpretation of result.
- In chapter five it is made up to summary of the work and recommendation of the work.
Chapter Five
5.0 Summary, Conclusion and Recommendation
This study is concerned mainly with the methods of debt recovery management and it’s effect on profitability index of banks.
In the course of project we found out the debt recovery is already intergreted into the financial system of Union Bank Nigeria Plc Ilorin.
The type of debt recovery management used by the organization is standard recovery system. According to the information obtained from the accounts system. The management choose standard recovery system, because it is mostly considered appropriate for their production system.
In addition, it is usually a standard used to recovered debt management.
In chapter two of this project we looked into the needs for debt recovery management the types of recovery being used, the benefits derived from such system and the requirement for the adequate debt.
Other debt techniques are instituted by all companies by typical recovery techniques maintained in Union Bank Nigeria Plc Ilorin debt recovery is very important to every manufacturing organization essentially in banking industries.
The method adopted by Union Bank Nigeria Plc in its debt recovery system is very adequate and this has enabled it to achieve a very satisfactory result in terms of profitability.
The major aim is to express the methods of controlling debt and the effective on the business as a whole.
5.1 Summary
Union Bank is basically a financial institution with specialized services like acceptance of bills of exchange portfolio management, equipment leasing as will as bill discounting and financial advising services.
However, the primary function still remain a part from the acceptance of deposit, they also provide medium and long term landing as apposed to merchant bank long term. Furthermore to the 2001 banking act, which defined banking business general.
The 2005 amendment act add to new dimension to the definition of a bank it state that the 2008 act and was amend in 2009, commercial bank “any bank in Nigeria who acceptance of bill etc.
Major Difference Between Commercial Bank and Merchant Banks
Lies principally on the retail nature of the later Union Bank are retail banker accepting deposit only in small units with a minimum initial deposit of N5,000 while merchant bank act primarily as large bankers.
A commercial Bank operate strategically from numerous open branches in both rural and when conters of the nation they are even given mandatory branches and allocation by the Central Bank.
Commercial bank were to provide mainly short term financing and term credit while wholesales provide medium and long term financial and advising services as well as deal extensively in the capital market while merchant banks worried by the dwelling earning.
The differentials in their sources and users of dept as recorded in this research, commercial bank accept deposit from all and sundry, while merchant bank depends mostly on public and private corporation and in their landing activities they deal in the acceptance of disanting of bill and capital market transaction.
5.2 Conclusion
The various policy measures have not really gone down well for the system especially for the commercial incursion into their salutary responsibilities. While merchant bank worried by the dwelling earning from their tradition function, the commercial bank are enamoring for an urgent change of status, they based their problem foet on the issue that with restriction on branch network and deposit collection, merchant banks could hardly perform their role of wholesale banking going by the liquidity squeeze in the system of commercial bank pool a list of debt from their branch network and so do hardly feet indimant business weather.
The distress in the sector has mostly affected the merchant bank. This is due principally to the completive edge by commercial bank ever merchant bank. With chapter funds commercial bank have been able to lend at rate below.
The official lending rate thereby matching customer from merchant bank which sources of debt are costly and have which source of debt are costly and have no option than to after higher lending rate comparable to their counterparts.
5.3 Recommendation
It is very difficult to recommend as specific approach to overcoming the problem associated with debt sourcing to facilitate effective utilization and enhanced productivity and profitability in the banking industry as great deal by environment factor frequently, different banks approaches to managing debt sourcing and utilization depending on complexity.
- Credit education for your customer promote customer satisfactory and generate cross sell opportunities through credit education implanant Better. Debt recovery strategies reduce cost, increase efficiency and maximum your debt recovery effort with our industry leading information assets, software and expertise in debt collection
- Location hard – to find debtors: You have been unable to reach and get the most up-to-date content information. Experian’s extensive database of consumer and commercial information are update frequently enabling you to locate elasuice debtors, make contact and collect unpaid debt.
- Collection prioritization and strategy develop a more focused collection strategy by determining which accounts have the highest payment potential. Our advanced scrolling and segmentation tools arm you with the complete portfolio intelligence you need to stay ahead of stay ahead of the competition.


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