AN EXAMINATION OF THE TECHNIQUES OF MANAGING FINANCIAL DISTRESS IN THE NIGERIA BANKING INDUSTRY
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AN EXAMINATION OF THE TECHNIQUES OF MANAGING FINANCIAL DISTRESS IN THE NIGERIA BANKING INDUSTRY
ABSTRACT
The researcher investigates the technique of financial crisis management in the Nigerian banking business. Among other things, the researchers’ objective of investigation.
To investigate bank recapitalisation as a method of dealing with financial distress.
To investigate debt recovery and cost reduction as a method of dealing with distress in the banking industry.
To investigate bank purchase and merger as a method of dealing with difficulty in the Nigerian banking industry.
The researcher gathered the essential information through a structured questionnaire and an oral interview. The researcher used textual and tabular format to analyse the data collected.
In both cases, chi-square and simple percentage were the primary data analysis tools.
The results indicated, among other things.
(1) That bank has to be recapitalized.
(2) That two or more distressed banks must combine in order to form a new, strong, and healthy one.
(3) The requirement for banks to recover their loans in order to remain in business.
To improve its survival and performance, a strong bank should take over a small and weak bank. Excessive operational costs were also determined to be one of the elements that contributed to bank hardship.
PROPOSAL FOR AN EXAMINATION OF FINANCIAL DISTRESS MANAGEMENT TECHNIQUES IN THE NIGERIA BANKING INDUSTRY
This study is an analysis of financial distress management approaches in the Nigerian banking industry. This research paper will suggest the problem statement and the approaches for controlling financial distress in the Nigeria banking business. It will also highlight the goal of the study, as the writer will offer both primary and secondary research.
The assignment also included a survey of existing literature on the topic of study, which the writer researched using textbooks, the internet, journals, newspapers, and other sources.
This work will also expose the writer’s study approach for collecting primary and secondary data and analysing them horizontally and vertically, which includes the data collection methodologies used.
Finally, the author described the facts, discoveries, recommendations, and conclusion. The author’s biography was also chronicled.
1.01 INTRODUCTION
1.1 BACKGROUND OF THE STUDY
The issue of financial distress in the Nigerian banking industry has become the “Conequences of bank failures,” and it has become a major source of concern for the government, financial institution regulators, and the general public.
Nigerians’ experience during the first age of bank failures in Nigeria, from 1953 to 1959, was such that the banking public was understandably concerned. Unfortunately, the crisis has subsided in the Nigerian banking system.
Also, distress in the Nigerian banking sector is a problem that must be addressed with vigour in order to reduce its frequency in the economy.
Although Nigerians first felt this was a good thing for the economy, it soon became clear that the apparent growth was an illusion and gross mismanagement.
The growing amount of distress in the nation’s banking system has had a detrimental influence on the economy by delaying the pace of corporate activities.
The bravery also affects some governments and healthy banks, which have lost part of the confidence that they had before the issue of banking crisis became apparent.
1.2 STATEMENT OF THE PROBLEM
Financial distress in the Nigeria banking industry will occur when a fairly reasonable proportion of banks in the system are unable to meet their obligations to their customers,
as well as their owners and the economy, due to weaknesses in their financial, operational, and managerial condition, which have rendered them either insolvent. A situation in which the obligations of a significant fraction of financial institutions exceed the market value of their assets.
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