THE IMPACT OF NEW MONEY MARKET PRODUCTS ON PROFIT PERFORMANCE OF COMMERCIAL BANK IN NIGERIA
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THE IMPACT OF NEW MONEY MARKET PRODUCTS ON PROFIT PERFORMANCE OF COMMERCIAL BANK IN NIGERIA
INTRODUCTION TO CHAPTER ONE OF THE IMPACT OF NEW MONEY MARKET PRODUCTS ON THE PROFIT PERFORMANCE OF COMMERCIAL BANKS IN NIGERIA
1.1 STATEMENT OF THE PROBLEM / OBJECTIVES OF THE STUDY
Commercial banks serve a large number of customers.
across the country with a full range of commercial money market banking products (service), but not tied to current savings and deposit accounts. Loans and overdrafts, provision of international money market banking services,
export credits and financial advisory services, farmer loan scheme, time deposit current account, statement savings scheme, house saving and loan scheme, first cash, UBA card, current account management services, money gramme or international money transfer system, scholarship schemes are all available.
All of these products were designed to generate profit for the banks involved, but due to changes in market demand for these goods and an unfavourable economic environment, sales of these products have declined, as has their profit performance (ANIBUEZE 1998). (PRACTISE IN BANKING)
As a result, banks introduced new money market products such as Network, Money Gramme, Western Union Money Transfer, save for school scheme, JAMB form sales, cash evacuation scheme, online real time scheme banking services,
all with the goal of improving these banks’ profit performance (NWANKWO 1990: Marketing Bank Products and Services). As a result, the question here is how profitable these products would be in order to have any impact on the profit performance of these institutions.
The goal of doing this research is to establish whether the new items introduced have had an impact on the profit performance of these institutions.
1.2 RATIONAL FOR STUDY
The banking sector of the Nigerian economy is undergoing significant changes as a result of periodic policy changes by the government, operation income depletion, and, most recently, the SAP of 1986, which attempts to de-regulate the financial system (OKAFOR 1988). (NIG. BANKING SYSTEM)
These changes have given birth to a variety of issues that banks, particularly commercial banks, are grappling with. These difficulties include low profit performance,
which has negatively impacted their operation activities, leaving most of these banks in distress, with approximately 26 of them being liquidated as announced in the Federal Military Government’s last annual budget.
This poor profit performance forced the launch of new products geared largely at improving these banks’ profit positions (Nwankwo 1992).
As a result, the rationale for this study is to examine the likelihood of these goods rescuing banks from their poor profit condition as a means of resolving the banking distress problem and ultimate liquidation, both of which have a negative influence on the economy in general.
1.3 THE IMPORTANCE OF THE STUDY
It is expected that this project activity will meet the needs of several economic interest groups.
The research will improve the efficiency with which banks manage new products in order to meet earnings targets. Other banks that have not found the influence of new money market goods on their profit performance will be forced to bring new items into their product (service) portfolio (Brown 1997).
The research will help to evaluate the government’s implementation of structural adjustment programmes.
1.4 DEFINITION OF TERMS
PRODUCT/SERVICE: Term used interchangeably, product / service as used here refers to an intangible commodity or an act performed by a bank in order to attract consumers or deposits (NWANKWO 1992).
PROFIT: A return on investment after deducting expenses to determine net income.
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