Abstract
In 2004, a major reform policy was undertaken in the Nigerian banking sector with the view to removing or minimizing certain operational constraints thereby enhancing the fiscal strengths, stability and efficient service delivery of the banks. This study assessed the impact of banking consolidation in order to ascertain whether it has yielded or yielding desired results with an empirical focus on Zaria based banks. The study is guided by the structural-functionalist theory. The data was quantitative and qualitatively generated and analyzed through tabulation and complimented with other primary and secondary sources. The study found out that Bank consolidation has positive impact on the service delivery to customers of the banks but not significant, which is due to pre-mature mergers, supervision practice and financial integration etc. It therefore recommends that regulatory mechanism should be improved and difficulties in services rendered by these banks should be minimized.

CHAPTER ONE
1.0                                                                          INTRODUCTION
1.1 Background to the Study
There has been a clear trend towards the abolition of geographic restrictions on banks and the consolidation of financial intermediaries around the globe in most recent years. This is fuelling an active public policy debate on the impact of banking consolidation on financial stability. The banking system is the engine of growth in any modern economy, given its function of financial intermediation. Through this function, banks facilitate capital formation and promote economic growth and development.
However, banks’ ability to engender economic growth and development depends on the health, soundness and stability of its system. The need for a strong, reliable and viable banking system is underscored by the fact that the industry is one of the few sectors in which the shareholders’ fund is only a small proportion of the liabilities of the enterprise. It is therefore, not surprising that the banking industry is one of the most regulated sectors in any economy (Oloyede,1994: 279).
It is against this background that the Central Bank of Nigeria (CBN), in 2004 under the governorship of Prof. Charles Soludo, outlined the phase of its banking sector reforms designed to ensure a diversified, strong and reliable banking industry. The primary objective of the reform is to guarantee an efficient and sound financial system. The reforms are designed to enable the banking system develop the required resilience to support the economic development of the nation by efficiently performing its functions as the fulcrum of financial intermediation.
Thus, the reforms were to ensure the safety of depositors’ money, position banks to play active developmental roles in the Nigerian economy, and become major players in the sub-regional, regional and global financial markets ( Uchendu, 2005 ). The key elements of the reform include: Minimum capital base of N25 billion, Consolidation of banking institutions through mergers and acquisitions; withdrawal of public sector funds from banks, beginning from adoption of a risk-focused and rule-based regulatory framework; zero tolerance for weak corporate governance, misconduct and lack of transparency etc.
Banking consolidation is defined as “the transfer of ownership in a payment and settlement context through mergers and acquisitions and other developments within the financial industry, such as alliances, joint ventures and the outsourcing of payment processing, that result in a higher degree of concentration of payment and securities settlement activities”( Aliyu, 2010; 32).
Prior to this period, most Nigeria banks were becoming personalized in ownership and management structure which made banks incapable to finance large scale and long term projects due to limited liquidity at their disposal ( Rhoades, 1993:57). The sector was characterized by import financing rather than encouraging domestic growth in the economy; there was loss of public confidence due to fear of liquidation, customers’ dissatisfaction on the services of banks in Nigeria among others. These negative

developments affected banks greatly and has become a matter of concern in view of the importance of the banking system to the economy.
For banks to function effectively as financial intermediaries, it is imperative that they themselves are viable and healthy and that the entire industry is stable and sound. It is in appreciation of this that the industry worldwide is usually heavily regulated and supervised. A major objective of regulation and supervision, therefore, is to ensure that the industry is sound and stable, thereby engendering public confidence in the system. The reform was announced in 2004 with steady consolidation through recapitalization, merger and acquisition that have resulted in fewer banks holding a great value of the total assets in the sector (Okpanachi, 2011).
1.2 Statement of the Problem
The study assesses the impact of bank consolidation on service delivery in Zaria from 2004 to 2014. Since the announcement of the reform policy in 2004 by CBN, a number of merger and acquisition was recorded as a strategy for consolidation of banks with a view to enhancing efficiency in service delivery of banks. The study, therefore, examines whether the reform has yielded or yielding the desired objectives in service delivery aspect.