Merger And Acquisition As A Consolidation Strategies In The Reforms Of The Nigeria Banking Sector (A Case Study Of Three Selected Banks In Owerri Imo State)

Project and Seminar material for Accountancy

Project and Seminar material for Accountancy


Abstract


Through financial intermediation, banks can facilitate capital formation and promote economic growth by operating in a save and sound manner. This means that bans are expected to ensure precedent management of assets and guarantee the safely of customer deposits/funds.For the conduction of this research, the researcher reviewed other related literatures necessary to prove data for the study from the related literature it was observed that consolidation and acquisition are used to maintain adequate and appropriate internal controls measure to prevent incidence of fraud, forgeries and other financial/ malpractice to ensure stability and engender public confidence in the financial system.

In this study, the researcher made use of questionnaire and data collected for the study were analyzed in tables using simple percentage method and hypothesis were tested by the use of Chi-square.
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Table Of Contents


Preliminary Page(s)

  • Title Page
  • Approval Page
  • Dedication
  • Acknowledgement
  • Abstract
  • Table Of Content

Chapter One

1.0 Introduction

  • 1.1 Background Of The Study
  • 1.2 Statement Of The Problem
  • 1.3 Objectives Of The Study
  • 1.4 Research Question
  • 1.5 Significance Of The Study
  • 1.6 Scope Of The Study
  • 1.7 Definition Of Terms

Chapter Two

2.0 Literature Review

  • 2.1 Introduction

Chapter Three

3.0 Research Design And Methodology

  • 3.1 Introduction
  • 3.2 Research Design
  • 3.3 Sources/Method Of Data Collection
  • 3.4 Population And Sample Size
  • 3.5 Sampling Techniques
  • 3.6 Validity And Reliability Of Measuring Instrument
  • 3.7 Method Of Data Analysis

Chapter Four

4.0 Presentation And Analysis Of Data

  • 4.1 Introduction
  • 4.2 Presentation Of Data
  • 4.3 Analysis Of Data
  • 4.4 Interpretation Of Result
  • Questionnaire

Chapter Five

5.0 Summary, Conclusion, Recommendation

  • 5.2 Summary Of The Finding
  • 5.3 Conclusion
  • 5.4 Recommendation
  • Reference
  • Appendix

Chapter One


1.0 Introduction

(According to Muru) In all human activities there are usually success and failure. Businesses, including banks are therefore no exception. In the period of loan as were experienced in the mid seventies thrived in an era of abundance and squander mamia. In such an era savings and investment are at their level-conditions favorable for banks to flourish and grow.

During this period also, banks do not think of means of survival and sustenance. They were all interested in building state of the art corporate entities to enhance their image and giving out loans indiscriminating without adequate realizable securities. On the other hand, when the lay daTa are over and down turns take over, the orders of the day as a result of macro-economic condition.

The situation as at now attained a dimension that can best be described as “cries level in the banking sector which became characterized by default in loan payment, dis saving and massive fraud at management level.


1.1 Background Of The Study

(According to Abraham) He says in all human activities, there is usually success and failure business including banks is therefore no exception. In period of loan as were experienced in the mid seventies thrived in an abundance and squander mania. In such an era savings and investments are at their peak level conditions favorable for bank to flourish and grow.

During this period also, banks do not think means survive and substance. They were all interested in building state of the art corporate edifies to enhance their image and giving out loans indiscriminately without adequate realizable securities.

On the other hand, when the lay days are over and down turns take over the orders the days arrive and banks failure become the order of the day as a result of adverse macro- economic conditions. The situation as at now attained a dimension that can best be described as “cries” level in the banking sector which became characterized by default in loan repayment,, dis-saving and massive fraud of management level.


1.2 Statement Of The Problem

Obviously every private and public enterprise in Nigeria have their accounting departments and there are increasing cases of financial mismanagement in usually all the public and private organization in Nigeria.

Also the problem of this study lies on how the manager of the enterprises are able to recognize the role of accounting in their sectors so that these case of improper accountability will be minimized.


1.3 Objective Of The Study

  1. The main aim of this project is to show consolidation and acquisition as a financial option to the productivity in Nigeria banks, consolidation and acquisition will help to increase the value of the combined banks
  2. Also enable the banks that lack general managerial ability to obtain it from other banks.
  3. The project shall highlight among others the following nature of consolidation and acquisition.

1.4 Research Question

  1. These questions are asked by research in order to find answer to the research problem. The questions are as follows.
  2. Is consolidation and acquisition in financial option to the productivity in banking industry in Nigeria economy.
  3. Can consolidation and acquisition increase the confidence Nigeria deposit have in Nigeria banks.
  4. Does consolidation and acquisition have any significant reduction in unsystematic risks after a business
  5. combination?
  6. Has consolation and acquisition achieve diversification of investment portfolio.

1.5 Significance Of The Study

  1. This study is of immense importance to the chief executive of banks, shareholders, employers and regulatory authorities, prospective investors in the financial sector and more.
  2. Especial the financial analysis and consultant
  3. The studies also help public especially the depositor to know the banks that are sound so as to understand distress.
  4. The investor in the industry will also know where to direct or re-direct their investment for optimum return on their investments.

1.6 Scope Of The Study

Since the consolidation and acquisition cause in Nigerian banking industries, the study will be limited to three of the acquisition

– Universal Trust Bank PLC by union bank of Nigeria Plc equity Nigeria banks limited by international bank Magnum Trust Bank by Guarantee Trust Bank on the consolidation part, this research will draw its data from bank consolidation in Nigeria.

– Platinum Bank of Nigeria by Habibi Bank of Nigeria, United Bank of African by Standard Trust Bank of Nigeria.


1.7 Limitation Of The Study

Firstly some of the banks will not agree to disclose the strategies they used in their business may be because of the competitive nature of the business or fear of opposition.

Secondly, the valuation method of the banks shares will differ from bank and in problems during negotiation between the interested banks.


1.8 Definition Of Terms

Merger:

It is the fusion of two or more existing companies to become one of the existing companies.

Acquisition:

It refers to the outright purchase of one company of a controlling interest in the share capital of another company.

Take- Over -Bid:

A take-over-bid is one whereby an offer is made to all the shareholders in any class of share, to buy share reasonable to gain fully or /partial control of the company.

Partial Merger:

It is a merger carried out for the purpose of pooling sales or orders or for sharing of net profit such consolidation are temporary


Chapter Five


5.0 Summary, Conclusion And Recommendation

The essence of this chapter is to summarize and conclude on consolidation and acquisition is to summarize and conclude on consolidation and acquisition as a financial option to avoid banks distress and recommend options available for prevention of liquidation and also serve as a boost for further researchers.


5.1 Introduction:

According to muru (1988:17)

In summary, consolidation on and acquisition as a financial option to avoid banks distress is aimed at justifying the need for prevention of banks distress collapse witnessed in the economy in the recent times.

Having carried out an in-depth research, it was believed that consolidation and acquisition of a financial option will strengthen companies more especially the banking sectors so as to avoid liquidation and serve as a boost to the Nigeria economy.


5.2 Summary Of Findings:

This research on consolidation and acquisition as a financial option to avoid bank distress hard the objectives of showing that consolidation and acquisition as a financial option is truly necessary for economic growth and development.

Consolidation and acquisition is aimed at justifying the need for prevention of collapse of banks experienced in the economy in this modern times mainly in the banking industry. To achieve this, both primary and secondary data inform of direct interview, articles and journals, seminar and annual reports were obtained and subjected to vigorous analysis using “percentage” and Chi- square” statistic with the aim the of accepting or rejecting that consolidation and acquisition as a financial option to avoid bank distress in Nigeria is necessary for growth of the economy or/and comparative to face future challenges. However, the result of the analysis and research finding show that;

  1. Consolidation and acquisition as a financial option is necessary for economic development and growth.
  2. Consideration and acquisition will make Nigeria banks stronger to face future challenges.
  3. Consolidation and acquisition as a financial option will help improve the financial conditions of Nigeria companies.
  4. Consideration and acquisition will help Nigeria companies maintain an adequate capital base.
  5. It will help Nigeria banks in the reduction of in efficiency through polling of resources, expertise and managerial, competence.
  6. Acquisition and consolidation will help secure the depositors in the Nigeria banks.
  7. It will make new banks grow and make profit through diversification and economic scale.

Notwithstanding, the number of problems highlighted in this project, it is believed that these prospects of consideration and acquisition are very bright.


5.3 Conclusion

Having carried out an in dept investigation on the applicability of consideration and acquisition as an option of financing banks in Nigeria, the researcher therefore makes the following conclusion

  1. Consideration and acquisition as an option will make significant diversification of their investment.
  2. Consideration and acquisition will strengthen the Nigeria banks so that there will strengthen the Nigerian banks so that there will be less liquidation cases. Despite the problems that will arise merging and acquiring banks consolidation still have positive prospects in Nigeria.
  3. All the shareholders in the banking industry, manufacturing and service industry need to support consolidation and acquisition to avoid distress in the Nigeria economy.

5.4 Recommendation

There is need for greater co-operation and collaboration among regulators, chief executives, investors board and management of banks and other stakeholders to pay attention to consideration and acquisition as a financial option to the productivity in banks and participate actively to the development for the Nigerian economy. Government and regulatory authorities should know that consolidation and acquisition in the banking industry is truly necessary for economic growth and development and should find a means of making the road to consolidation and acquisition much for the interested parties.


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