EXAMINATION OF TREASURY MANAGEMENT PROCEDURES AND THEIR IMPLICATION ON BANK PERFORMANCE.
Need help with a related project topic or New topic? Send Us Your Topic
DOWNLOAD THE COMPLETE PROJECT MATERIAL
EXAMINATION OF TREASURY MANAGEMENT PROCEDURES AND THEIR IMPLICATION ON BANK PERFORMANCE.
ABSTRACT
Topic: An evaluation of treasury management practises and their impact on bank performance (using United Bank for Africa plc Enugu as a case study).
It has been noted that the Nigerian banking industry is riddled with problems of fraud, distress, and failures in banking institutions. Most of these failed or distressed banks have had such experiences not because they are underfunded, but because they do not apply the concept of treasurers management in their operations.
Banking is just a fund-gathering and fund-using company; money is obtained through capital, deposits, and borrowing, and the objective is to maximise its usage. As a result, treasury management at a bank is concerned with fund mobilisation and proper utilisation.
As a result of the foregoing, this study critically examined the topic of an examination of treasury management practises and their impact on bank performance.
This topic is divided into five chapters, which are as follows:
The first chapter
Introduction: This section introduces the topic statement’s background, purpose/objective of the study, research questions, research hypothesis, significance of the study, scope constraints and delimitations, and term definitions.
Then, in the backdrop, I’ll explain the complete scope of an evaluation of treasury management practises and their impact on bank performance, as well as the history of my research case study in my statement problem.
Second, in Chapter 2, I will review all relevant material. I used it in my study as well as the topic definition.
In addition, in Chapter Three, I will discuss my research design and methodology, population, sample and sampling methodologies, data collection instruments, data presentation method, and data analysis method.
My chapter four will include data presentation and analysis from the research.
Finally, in my final chapter, chapter five, I will conclude and recommend on the research, then create the final conclusion and attach my bibliography to express respect to all the people who worked on my project.
INTRODUCTION TO CHAPTER ONE
1.1 Background of the research
Many Nigerians have recently witnessed a wave of failures, fraud, and suffering in the banking business.
On the other hand, it is not far from the reality for employees that some banks in the country have been able to forge on and keep their heads above water despite the nation’s economic predicament.
According to studies, the success and failure of most modern corporate organisations (particularly in Nigeria) is dependent on the capacity of individuals in charge of these organisations to successfully use management concepts.
However, events have demonstrated that companies, such as banks, require more than just regular management. There is an unmet requirement for the bank to use treasury management techniques.
Treasury management, according to Okeya (1997:21), is concerned with the ability to plan, mobilise, monitor, and manage liquid financial resources.
He went on to say that such management will not only lower the danger of loss, but will also go a long way towards improving net earnings in a way that is compatible with the organization’s strategic objectives.
However, at this point, it is necessary to ask why it is critical for banks to understand the concept of treasury management and the goals to be reached through treasury management.
According to Akin-Ajayi (1993:4), the importance of treasury management to the banking industry cannot be overstated, and the goals of treasury management include, among other things, assisting a bank in maintaining the ability to pay availability of funds at the right times and in the right place.
In the appropriate currencies and at an acceptable cost to minimise idle balances and, overall, to ensure that adequate funds are accessible to banks to service their demands and meet the C.B.N liquidity and reserve requirements.
A glance at the above viewpoint demonstrates that in today’s world, no bank can fully reach a respectable level of success without recourse to the notion of treasury management.
However, the question is how far the Nigerian banking industry has been able to incorporate these notions into their operations. And to what extent can a bank’s treasury management improve its liquidity position?
As a result of the foregoing, this study attempts to critically investigate the topic of treasury management and its impact on bank performance, with a particular focus on the United Bank for Africa (UBA)0000000 plc.
1.2 Satement of the problem
Commercial bank asset management is a never-ending tug of war between efficient liquidity management and profitability on the one hand.
Organic growth in financial markets, as well as the spread of liability management, have resulted in more diversity in banks’ obligations and assets, as well as higher risk exposure due to maturity mismatches.
This has had a negative impact on bank earnings and liquidity to the point where the requirement to minimise or avoid such and other associated risks has necessitated a system approach to bank fund management.
On the one hand, holdings of reminerative assets are financed by comparable liabilities, while on the other hand, liabilities may be accepted in advance of commitment.
The latter are then used in acquiring the former. Its key strength is its capacity to systematise and include different approaches to decision making that use management expertise.
Furthermore, the major factors that impact profitability are recognised, such as gap management, liquidity, cost control, and so on.
This has the overarching goals of making decisions consistent with the overarching goals of profit maximisation within the constraints of liquidity and solvency. It has been noted that the last decade brought with it a different economic environment, which emerged with the debt crisis and the serious payment difficulties experienced by developing debtors economics.
Bank assets must be reclassified, and international credit to developing countries must be reduced. Increased maturity mismatches and risk, including nation risk, were observed.
All of this resulted in securitization and a growth in balance sheet business, allowing banks to expand their operations and earn fee income without growing their balance sheet footings.
This is especially pertinent in Nigeria today, when the economy has been significantly deregulated and the debt problem is far from over.
However, a modern-day treasurer is concerned with the whole of a bank’s fund management; however, the recent spate of distress fraunds, failures, and awful performance of bank competitors begs the question of how far Nigerian banks grasp the concepts of managing their treasury.
As a result of the foregoing, this study intends to take a critical look at the challenges of treasury management practises and their impact on bank performance.
1.3 objectives of The research
According to studies, the success of any organisation is primarily determined by the extent to which both human and material resources are handled.
Banks, on the other hand, demand more than ordinary management; in any event, the general goals of treasury management are to mobilise, monitor, and manage liquidity.
Financial resources because such management increases net earnings in a way that is consistent with the organization’s strategic objectives. As a result, the following are the study’s objectives:
a. To investigate how banks preserve their ability to pay obligations as they become due.
b. How do Nigerian banks handle their defined liquid assets in order to maximise bank returns?
c. What are the issues impeding banks’ ability to manage their treasury?
d. To what extent does the bank secure the adequacy of funds in order to meet CBN liquidity criteria while also serving the bank’s needs?
a. Determine how banks ensure that funds are available at the right time, in the right place, in the right currencies, and at an acceptable cost.
f. What are some potential solutions or suggestions for dealing with these issues?
1.4 RESEARCH QUESTIONS
In order to carry out the investigation, the researcher felt it was necessary to pose some research questions.
This will allow us to achieve the study’s objectives. As a result, these research questions are developed based on the study’s purpose, and posing the following research questions becomes an iressable imperative.
(a) How do banks manage their ability to pay obligations when they become due?
(b) How do Nigerian banks manage their liquid assets to optimise bank returns?
(c) What are the issues impeding the bank’s capacity to manage its treasury?
(d) To what extent have banks ensured the sufficiency of funds in order to meet CBN liquidity criteria while also serving the bank’s needs?
(e) How can banks assure the availability of funds, particularly at the appropriate time, in the right place, and in the right currency at the right price?
(f) What are some feasible solutions or suggestions for dealing with these issues?
1.5 RESEARCH HYPOTHESIS
Ho: Treasury management is not one of the methods by which banks can retain their ability to pay oblation when it becomes due.
Hi: Treasury management is one approach for banks to keep their ability to pay obligations as they come due.
Ho: Effectively managing a bank’s liquid assets does not boost its return (profitability).
Hi: Effective management of a bank’s liquid assets raises its return (profitability).
Ho: Effective management of a bank’s liquid assets boosts its return (probability).
Ho: A poor management team is not the main issue impeding the bank’s capacity to manage its treasury.
Hi:The main issue impeding the bank’s capacity to manage its treasury is a poor management team.
Finally, this study is significant because the researcher believes it will contribute to the academic development of theories of treasury management and will thus serve as a springboard for other fellow students researchers, particularly those who may wish to research further on the subject matter in the future.
1.5 The research’s objectives
The researcher felt it was vital to work on the following hypothesis when conducting this investigation;
Hi: The bank’s ability to meet its liquidity needs is heavily reliant on its treasury management practises.
Ho: The number of depositors in a bank has no positive effect on the bank’s cash flows.
Hi: The number of depositors in a bank has a significant positive impact on the cash flow of the bank.
Ho: There is no time limit on how long it takes a bank to recoup its debts.
The bank’s earning potential is significantly impacted.
Hello: The time it takes a bank to recover its loans has increased.
The bank’s earning potential is significantly impacted.
1.6 The Significance of the Research
The value of treasury management to the banking industry’s success cannot be overstated.
Because there hasn’t been much written on the subject, this study is particularly important because it will allow the researcher to describe some of the fundamental concepts of treasury management so that most banks in the country can profit from it.
This research is also relevant since it. The researcher will unearth or reveal to the banking industry the importance of proper treasury administration in order to reduce idle balances.
Furthermore, this study is crucial because the findings and following recommendations will help both banks and non-bank financial institutions understand the importance of treasury management.
1.7 Definition of terms
The definitions of terms that follow represent the precise meaning(s) that will be assigned to them in this study.
These are the terms:
MANAGEMENT
In this subject, management refers to the act of using an organization’s resources to achieve predetermined goals.
ORGANISATION
This refers to a social system consisting of an organised group of people working together to attain a common goal.
LIQUIDITY
This refers to a bank’s ability to pay cash quickly when called upon to do so for all of its demand liabilities.
PORTFOLIO
In this sense, portfolio refers to the list of securities and investment loans, stocks and shares, bonds, and so on that a bank, individual, or organisation has (owns).
THE TREASURY BILL
Treasury bills are investments issued by the federal government to raise funds.
SOLVENCY
In this study, a bank’s solvency is determined by its capacity to convert its assets into cash in order to pay its deposit obligations.
Need help with a related project topic or New topic? Send Us Your Topic