The Source And Application Of Funds To A Commercial Banking Sector (A Case Study Of Access Bank Plc)

Project and Seminar Topics with material for Banking and Finance

The Source And Application Of Funds To A Commercial Banking Sector (A Case Study Of Access Bank Plc)


Abstract


This project work examines the sources and application of funds in a commercial banking sector with a particular reference to Access Bank Nigeria Plc. This is an attempt to explore and reveal the extent to which the bank is sourcing its funds and how it uses those funds so generated in achieving the bank’s goals and objectives with a particular reference to laid down accounting principles and Central Bank’s Prudential guidelines on commercial banks. Also to include is the review of related literature, text books, magazine, newspapers, journals and even the proper website on the internet will be browsed for easy reviews, analysis and down loading of current related information for the project work. The study will also include the various ways and method of data collection i.e. primary and secondary sources through interviews, observations and examination of existing banks records.

The major difficulties to be encountered in the course of this project are time and financial constraints as collection and analyzing of data requires a lot of time, to pay regular visit, to the venue of the case study, attending lectures, writing of assignments and quiz, visiting the cyber café for internet browsing and also attending one’s domestic responsibilities. Financial requirements such as production and distribution of questionnaires, transportation and binding of the project work expenses forms the major limiting factors to the project work.

The research study will also highlight the need for prudential management and project accountability with good policies on loans and advances as the way for the bank to acquire maximum liquidity and affective application for the accrued funds by customers and shareholders. The challenges of the modern banking in a global trend and proper solutions and recommendations for the bank development, investments and enhanced customer relations will also be highlighted.


Chapter Five:


Summary, Findings Conclusion and Recommendation

5.1 Summary of Findings

The subject matter of this project work is SOURCES AND APPLICATION OF FUNDS OF ACCESS BANK NIGERIA PLC.

The thesis has tried as much as possible with the available data obtain, to analysis all the avenues opened to the bank to source money and how this funds will judiciously expended in the course of realizing the goals and objectives of the bank and shareholders.

The whole project work is divided into five chapters, with each having its intended purpose(s) to be achieved. This can equally be summarized in the following:-

  • To find out the degree of objectivity, profitability, liquidity position, and the image of the bank, with consideration to the present state of the economy, and new banking trends globally.
  • To explain in detail the effectiveness of the policies and procedures put in place for proper sourcing and utilization of their funds.
  • To find out the possible effects of the policies on the performances of the bank are consequently recommend, possible and positive solutions and suggestions.

The topic is fully explained in chapter one in cooperating the historical back ground and business of the bank. The statement of problems generally, aims and objectives of the study, hypothesis, scope and delimitation, so that the reader could know at the initial stage what the project is all about. Because of the importance attached to the various ways in which the bank employs its funds, comparison has been made between ordinary shares, and capital loan stock, which forms the bulk of the internal sources of funds to the bank. A review of some pertinent work was also carryout. Many references were made to books on related issues, journals, magazines, handouts etc, written by experts in both accounting and banking and finance.

The research work was also carried out through different methods, ranging from interviews, observation and documentary evidences which were applied in data collection technique.

Presentation and analysis of data was done to show their costs and effects on the financial leverage of on the earnings per share to the shareholders.

The reader has also been furnished with all the internally generated revenues of the bank as analyze in chapter four. Adequately the finding of the research work was presented in both written and tabulated graphs to give correct illustration of the presented data.

Finally, conclusions and recommendation of the research work was based on the findings after a critical and objective consideration in order to allow for improvements on the present efforts so far achieved.


5.2 Conclusion

Based on the findings of the research work analyzed in chapter four that research has agreed with the hypothesis “that lack of proper financial management and accountability can hinder effective sources and application of funds”. Attention was focused on the most important obligation of any commercial bank.

This obligation is maximum liquidity to the customers and maximum profitability to the shareholders who owned the bank. Therefore the efficiency of any commercial bank depends largely on the extent to which these obligations are efficiently discharged.

The bank from inception to date has performed auditabily well, by performing a good number of activities which have helped in achieving the bank’s objectives. This is done by the provision of loans and supervision of such loans for prompt payment, which still needs an improvement.


5.3 Recommendation

Chapter 1 and 2 gave an appraisal of the general problems which bear most people from operating with commercial banks, especially the non-working class, also as stated earlier on, limited liability companies and this bank (Access) are engulf or surrounded with series of problems which retard their effective management of their resources. One of such problems includes inadequate sources of funds to carryout their functions as effectively as possible. Though some of the years under review witnessed too much pressure on the naira via inflation, fuel shortages and many economic and financial crimes commissions being promulgated and the re-capitalization of the banking section by the CBN, yet the bank has beyond the static financial market. The management functions of planning and control are the measurement and correction of the performance of activities of subordinate in order to make sure that enterprise objectives and the plans devised to attain them are being accomplished. It is thus the function of every manager and from the chairman of the board to supervise all the levels so as to involve subordinates actively.
Some managers particularly at higher levels tend to forget that primary responsibility for the exercise of control and effective resources management being human or material rests in everybody’s hand charged with the execution of such plans. The following will go along way in making the bank realizes its objectives as regards sources and application of funds;

  1. To maintain a good customer relationship by offering credible banking services.
  2. There should be plans to embark on a major strategic planning design to moderate and increase the level of the bank operations to enable it meet up with the liquidity and profitability to both their customers and shareholders.
  3. The bank’s monitoring and supervision department should make sure that all loans advances and assistance are strictly used for the purpose(s) intended, and intensify the level of loans recovery.
  4. The new technological and infrastructural development adopted by the bank should continue at a less possible cost. The management should also tray to build a functional and equipped staffs training school, to further enhance the level of the staffs performance(s), and develop their mind in knowing what they are employed to do at an optimum efficient level of output.
  5. So far the manner in which loans are advanced, recovered and collected requires important policies by the decision makers of the bank, therefore the bank directors and management should be determined to restructure the lending policies of the bank, and delegate capable and appropriate authority to the lending section of the bank, and also established procedures for the review of important loan application and recovery of outstanding ones.

The bank can also reduce the number of loan defaulters and improve the ability to repay loan back to the bank, there should be a review to the current interest rates and subsidies on loan. The application of funds by the bank could be minimized by employing the services of experts on financial management and cost accounting to give professional advices on how best to maximize profits, source and expends funds, and also reduce unnecessary expenditure so that the bank can develop faster and becomes more stronger and reliable.


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