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CHAPTER ONE
1.0 INTRODUCTION
With the deregulation of the economy and
the emergence of several government regulations, the traditional role of Universal
Bank as providing short term finance has undergone an economic metamorphosis
resulting in the granting of license by Nigeria Stock Exchange to universal bank
to participate to a greater extent or length in the capital market.
And these
enhance banks to go into various capital project financing through their corporate
finance unit thereby erecting more profit or revenue generation.
1.1 BACKGROUND
TO THE PROBLEM
The deregulation
and liberalization of the banking industry in 2004 has changed the industry
landscape in many aspect, prominent among the changes are: –
–
Decrease in the number of banks
–
Specialization in banking industry and non-bank financial
institution, discount house, finance house and micro finance.
–
Automation in banking industry, computerization and
technology enhancement.
–
Raising of minimum paid up capital to N25 billion for both
universal and Merchant banks.
The highlighted
changes among other gave N25 billion paid-up capital for a degree completion
resulting in innovation and product development or service development. A number
of banks had been forced to patronize the capital market to source for fund in form
of capital. Thus, the current wave of development of new service product become
a reaction by bankers to the consciousness aroused with respect to the
treatment to be met out to customer as well as the need for sound improvement
on their liquidity position and capital base.
However,
the new service products are directly aimed at mobilizing deposit and revenue
generated through fee based transactions which are mostly directed to corporate
customers. And with the target of providing a corporate finance services to corporate
body with capital project through their corporate finance unit with the aim of generation
more profit or income.
1.2 STATEMENT
OF THE PROBLEM
In the
statement of this research work, corporate finance takes on various investment services
to institutional and private investors such that these adequate services does not
reduce some abnormality that may hinder the much needed profit in their operation
which can be deduced from the understand:
i.
That bank ensures the adequate collections of
collateral before loan are given out.
ii.
That bank does not operate within the aggregate limit in
their finance services in order to facilitate the achievement of government
social economic programme and profitability.
iii.
And that bank does not ensure correction measure or
action to be taken if the borrower does not repay in accordance with the agreement
as arranged.
1.3 OBJECTIVE
OF THE STUDY
The
examination of corporate finance service on Universal banking in Nigeria is pertinent
at this time of little or no bank failure couple with government concern for
stable and self reliance economy through high sustainable productive capacity,
since such service provides companies with the necessary finance is for dynamic
base to meet future challenges.
However,
the aim of the study is to identify the corporate finance services offered by
Nigeria Universal Banks as compared with banks in developed economy.
1.4 STATEMENT
OF RESEARCH HYPOTHESIS
According
to Kertiger, F. H Dictionary “An hypothesis is a guessed statement of a
relationship between two or more variables.
The above definition
serves as a guide for the research test for hypothesis
Hi: That corporate finance management reduces the
level of fraudulent practice in bank and boost profitability.
Ho: That corporate finance management does not reduce
the level of fraudulent practices in banks and hinders their level of profitability.
Hi: There is significant correlation between the corporate
finance services in reducing the level of fraudulent act and profit generation.
Ho: There is no significant correlation between the
corporate finance services in reducing the level of fraudulent act and profit generation
restriction.
1.5 JUSTIFICATION OF THE STUDY
The research
work is conducted mainly on corporate finance service as it relates to institutional
leaders and its impact on banks profitability with little emphasis on universal
banking. And to be a guide for academic excellent and to companies who are unaware
of such service facilities in banks.
1.6 SCOPE OF
THE STUDY
The project
covered corporate finance services in universal bank but limited to those in
existence presently at First Bank of Nigeria Plc.
1.7 LIMITATION
OF THE STUDY
The study
like many other studies has a share of limitation as in every human undertaken there
are always constraints in achieving the set down goals in which this project is
not left out. Some of these constraints include the following: –
a. Time Factor: – It would be
generally agreed upon that carrying out research work involves a lot of timout this
project is very short.
b. The problems of data collection and its accuracy:
– It is well known fact that bank staffs are always busy during
and after business hour with customers and balancing of each day account. So as
a result of this questionnaire set out were not returned on time even many questions
were not answer or retuned. The reason behind this might be due to the amount of
secrecy as professional ethic of the job.
c. The problems of finance to augement the
effectiveness of the project.
d. Also, the book that were available in the
school library here are outdated, beside these is the lack of power supply (electricity)
in the school environment for more research online.
1.8 DEFINITION OF TERMS
Corporate Finance: – This is concerned with making
the provision and the use of a firm’s finance which involves the allocation of scarce
capital resources among competition opportunities
Corporate Finance Services: – This is
the services rendered to companies or business organization by provision them
with fund to run smoothly the business usually from a bank.
Profitability: – This is the ability of the corporate
finance operator to earn profit or gain to the extent that the principal sum,
interest and desire profit of an advance made is repaid.
Bank: – This is an institution or financial
intermediaries that offer various financial services to both individual and corporate
customers
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