IMPACT OF BRIDGE BANKING ON DISTRESS RESOLUTION IN THE NIGERIAN BANKING SECTOR

ABSTRACT

The study investigates the impact of bridge banking on the resolution of distress in the Nigerian banking industry. The purpose of the research is to examine whether the establishment of bridge banks would help develop the Nigerian banking industry, to establish weather bridge banking has helped in distress resolution. The survey research design was adopted with of special questionnaires to employee of central bank of Nigeria as well as a staff of the two bridge banks in Nigeria. Frequency distribution table was used for data presentation with percentage method for data analysis as chi-square test was used for hypothesis. it was discovered from empirical information/response that bridge banking not only helps in distress resolution but also in the development of the Nigerian banking industry. It was thereafter recommended there should be increase supervision of activities of deposited money banks in Nigeria to fast all distress.

TABLE OF CONTENTS

Title page                                                                                              i

Declaration page                                                                                     ii

Certification                                                                                           iii

Dedication                                                                                             iv

Acknowledgment                                                                                   v

Abstract                                                                                                vi

Table of content                                                                                     vii

CHAPTER ONE: INTRODUCTION

1.1     Overview of the Study                                                                   1

1.2     Statement of the Problem                                                               2

1.3     Purpose of the study                                                                      4

1.4     Research Question                                                                         5

1.5     Research Hypothesis                                                                      6

1.6     Scope of the Study                                                                        6

1.7     Significance of the Study                                                               7

1.8     Limitation of the Study                                                                   8

1.9     Definition of Terms                                                                       8

1.10   Organization of the study                                                               9

1.11   Summary                                                                                     10

Reference                                                                                              11

CHAPTER TWO: LITERATURE REVIEW

2.1     Conceptual issues                                                                          12

2.2     Theoretical Framework                                                                  45

2.3     Empirical Review                                                                          48

Summary                                                                                              56

Reference                                                                                              57

CHAPTER THREE: RESEARCH METHODOLOGY

3.1     Introduction                                                                                  59

3.2     Research Design                                                                           59

3.3     Population of the Study                                                                  60

3.4     Sample Size                                                                                  60

3.5     Sample Techniques                                                                        61

3.6     Method of Data Collection                                                              62

3.7     Techniques of Data Analysis                                                           62

References                                                                                            64

CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS

4.1     Introduction                                                                                 65

4.2     Data Presentation                                                                          65

4.3     Data analysis                                                                                 66

4.4     Test of Hypothesis                                                                        82

References                                                                                            89

CHAPTER FIVE: DISCUSSION, CONCLUSIONS AND RECOMMENDATIONS

5.2     Discussion of Findings                                                                   90

5.2     Conclusions                                                                                  91

5.3     Recommendations                                                                                  92

5.4     Bibliography                                                                                  94

CHAPTER ONE

1.1 …

1.2     STATEMENT OF THE PROBLEM

The quest to embark on this research work by the researcher is anchored on a number of factor which in its entirety, represent a black spot in the Nigeria Banking Industry, of particular note is the re-occurring cases of bahk distress premeditating the adoption of bridge banking solution. The statement of problem therefore becomes the following:

i.       Rising case of bank distress in the country: Saduiki (20 12) placed the Nigeria in the Banking industry as ojne with the highest case of bank distress in sub- Saharan Africa. A total of five (5) era of distress have been witnessed with each involving massive losses of jobs, erosion following such distress. This therefore increases the fall for a distress resolution which would stand the test of time. Accordingly, the research shall examine bridge banking system in Nigeria banking industry with a view to indentify us impact in the resolution of bank distress in Nigeria, banking industry distress have been witnessed with each involving massive losses of jobs, erosion of deposition fund general economic stock following such distress. This therefore increases the fall for a distress resolution which would stand the test of time.

ii.      The low level of confidence in the Nigeria banking industry: Adems (2012) stated that there is a significantly low level of trust, confidence reposed by bank customer and shareholder in the management of Nigeria Banking. The implication of this is that customers and investor (shareholder) do not want to commit significant portion of their funds to bank. It is therefore important that for the banking industry to progress, an adequate system of distress resolution be put in place to ensure increase customer and investors patronage.

iii.     Under development of the Nigeria Banking sector: cases of mismanagement of -banks funds, non- performing loans/ bad debt e.t.c have made the level of development of the Nigeria banking industry to be slow Ajibade (2012) observed that the industry actual growth rate is less than 5th This is in comparison with suddenly increase of bank capital from 2 billion to 25 billion to this end a system that will guarantee steady development of the industry (even in the event bank distress should be encouraged)

1.3     OBJECTIVES OF THE STUDY

The researcher objective is categorized under two main focuses the main objective is an assessment of the Nigeria banking industry Herein bridge banking focus on temporary bank set up by the government to acquire and control the set up by the government to acquire and control the asset ownership and liabilities of a failed developed researchable objectives which include:

(i)      To measure the role of bridge banking system in the resolution of bank distress in Nigeria.

(ii)     To ascertain the extent to which bridge banking system would help restore investors and depositors confidence in the Nigeria banking industry.

(iii)    To establish whether the adoption of bridge banking system would help to develop the banking industry in Nigeria.

1.4     RESEARCH QUESTIONS

Asika (2002) defined research question as a researcher hope the study would give answer to specially the following are the question of this study

(i)      Can bridge banking system ensure resolution of bank distress in Nigeria?

(ii)     Would bridge banking system to restore the depositor or investors confidence in the banking system Nigeria?

(iii)    Would bridge banking system help to develop the Nigeria banking system?

The above question shall guide the researcher in not only the choice of data but also the instrument for data collection and analysis.

1.5     STATEMENT OF HYPOTHESIS

H0:     Bridge banking system cannot ensure the resolution of bank distress in Nigeria

H1:     Bridge banking system can ensure the resolution of bank distress in Nigeria

H0:     Depositors and investors confidence cannot be restored in the Nigeria, banking industry through bridge banking system.

H1:     Depositors and investors confidence can be restored in the Nigeria banking industry through bridged banking system

H0:     Bridge banking system would not help to develop the Nigeria banking industry

H1:     Bridge banking system would help to develop the Nigeria banking industry.