Oxford Legal Dictionary

oxford legal dictionary

The Winning Brief: 100 Tips for Persuasive Briefing in Trial and Appellate Courts

$30.00

Good legal writing wins court cases. In its first edition, The Winning Brief proved that the key to writing well is understanding the judicial readership. Now, in a revised and updated version of this modern classic, Bryan A. Garner explains the art of effective writing in 100 concise, practical, and easy-to-use sections. Covering everything from the rules for planning and organizing a brief to op…

A Dictionary of Modern Legal Usage (Oxford Dictionary of Modern Legal Usage)

$18.96

Garner’s Dictionary of Modern Legal Usage gives authoritative guidance on all the vexing questions that legal writers face, from correcting grammatical errors to framing legal issues to distinguishing between similar but distinct legal terms. With great detail and care, Garner explains what legalese is, how it can be simplified, and how far legal writers can go in simplifying it. The topics are al…

1001 Legal Words You Need to Know: The Ultimate Guide to the Language of the Law

$7.65

1001 Legal Words You Need to Know explains and illuminates the most difficult and arcane vocabulary any American has to deal with–that of the law. This comprehensive– but never condescending–guide to the language of the American legal system carefully defines and explains every term, and many entries have supplementary notes and a sample sentence. These notes include information about grammar a…

Get Out Of Debt Free paperwork

The effect of bank consolidation on bank performance in Nigeria

CHAPTER ONE

1.0 BACKGROUND OF STUDY

The recapitalization and consolidation exercise in the banking sector by the former Central Bank of Nigeria Governor, Professor Charles Soludo has necessitated the need for different organization to participate in the consolidation of companies (mergers and acquisitions). The term refers to the recapitalization current trend of requiring all commercial banks to increase their capital base 2billion to 25billion Naira by the Central Bank of Nigeria on or before December 31, 2005. This has sent some of these banks to consider moving Mergers and acquisitions as a survival strategy.

Where we were before consolidation

89 banks with 3382 branches predominantly in urban centers as of June 2004 is characterized by structural and operational deficiencies, including:

Under capital base; Prevalence of some banks
Insolvency and illiquidity.
Depending on public sector deposits and trade currencies.
Poor quality of assets.
Weak corporate governance, a system with low confidence of depositors.
Banks not appropriate to support the real sector of the company in 24% of GDP, compared with the average African 78% and 272% for developed countries.

1.0.1 THE VISION OF CONSOLIDATION ARE AS FOLLOWS:

In Africa CBN financial center and as one of the best in the world
Facilitate the development of a sound banking system and insurance
Improving transparency and accountability in the sector
Driving down the cost structure of banks and increase their competitiveness and development oriented
A new banking system that depositors and investors can trust can rely on the beginning of a new economy

There are signs that banks are now favorably disposed to the consolidation (mergers and acquisitions) After considering several options available to them by reason of the introduction of the recapitalization 25billion Naira, which also sends the majority of banks Directors and their boards to meetings and classification of the game plans of the preliminary reports from the negotiating table, banks may have several options to explore. In an attempt to ensure that banks meet the new requirement, some banks are exploring the possibility of inviting foreign investors to buy the banks. Other people are looking the possibility of getting investors to shore up its capital, and some are looking at the option of the capital market, while others are considering mergers and acquisition.

This process of recapitalization of the recapitalization and restructuring of Nigeria (commercial) banks have been accelerating since the decision was taken by CBN on recapitalization of banks in Nigeria 2billion 25billion naira by December 31, 2005. The recapitalization plan as confirmed by the governor CBN, Professor Charles Soludo, is a subtle way to force banks to merge to Nigeria to strengthen the entire Nigerian banking system through consolidation (Mergers and acquisitions). The process over the banking sector would allow to meet international standards.

Also the pronunciation by Professor Charles Soludo, the recent change in the banking industry has necessitated the need for the various banks to participate in the consolidation. The advancement of Oxford English dictionary fourth student edition (1999) defines consolidation as a positive energy or success stronger so it is more likely to continue as the combination and concentrations commercial companies into one. Acquisition by contrast was defined by another source such as a company a controlling stake in another company, may be legal alternative another company or selected assets of another firm.

May involve the purchase of another company of assets or shares in the acquired company continued to exist as a subsidiary legal ownership required. For the purposes of this study, mergers and acquisitions, be deemed to have occurred when two or more organizations join all or part of their operations. Globally, these business combinations have involved various sizes of businesses and assets and have cut off all economic sectors. While many business combinations have been well received by the parties involved, others have done with strong resistance often results in long battles to prevent combinations.

With the latest regulation of CBN and the systematic withdrawal of federal funds from banks, many banks are on the verge of extinction. As a result in this set one of the banks are now going public or trying to position itself as the bank of choice for the possible merger or acquisition by other banks. This new development will also impact on employment, such as higher management would be affected and staff of other young people would be thrown into the labor market supply market to have the required number of directors and by regulators in the economy in general.

In Nigeria today, a number of banks wishing to merge can run into difficulties, because most Nigerian banks are not quoted on the stock market and property of some are really bad. The effect of the merger is that the merging banks in the country, under the dispensation may lose their licenses and be issued to reflect the new consolidated group. In proceeding in Chapters following critical look will be taken further on the impact that this development can or will have on Nigeria's banking sector and the economy in general.

1.1 THE PROBLEM

Business organizations are seeing recently Consolidation (mergers and acquisitions) as an alternative means recapitalization. The current trend of requiring all commercial banks to increase their capital base to 25 million 2billion naira by CBN on or before December 31, 2005 has sent some of these banks in their heels to consider mergers and acquisitions as a survival strategy.

He hopes that problems relating to the consolidation is

Do not leave a high degree of calculated risk taking to seize opportunities arising from the framework of its activities, but the risk avoidance business Nigeria, where the risk is low, development is also low and industrial progress becomes nearly static.

The consolidation may be a company very costly in terms of funding necessary to successfully prosecute.

Corrupt practices in the levels of public and private sector are another impediment. This need to be discouraged and the incidence of corruption practices should be severely punished, because it deals with consolidation requires trust and confidence to promote consummation.

Anaemically Nigeria suffers from a lack of information that unfortunately can hinder significant jumps in business combinations

1.2 OBJECTIVES OF THE STUDY

The primary objectives of this study are

To evaluate the involvement of consolidation in banking
To examine the impact of consolidation on the shores of Nigeria.
To highlight potential policy challenges consolidation of banks
Assessing Nigeria banks before consolidation
Identify the benefits of consolidation of banks
Evaluate the prospect of banks after the consolidation
Assess the impact of bank consolidation in Nigeria

1.3 STUDY SIGNIFICANCT

The importance of this study is to add the general body of knowledge to inform general public on the effect of bank consolidation on bank performance in Nigeria. And also explain the challenges of consolidation of banks. This research also establish the fact that the consolidation (mergers and acquisitions) is a real means to stimulate the growth of banking.

Reaches 1.4 and LIMITATION OF STUDY

The scope of this study is to understand the challenges of consolidation of banks.

Due to the restriction financial, with casualties, the investigation will make use of available materials with the Securities and Exchange Commission Library. Central Bank of Nigeria (CBN) and the Association Home emission Nigeria library, where books related to the research topic will be consulted and the Internet.

QUESTION 1.5 RESEARCH

The question in this research is

Is there a significant relationship between capitalization and the liquidity ratio of banks in Nigeria?
Is there a significant relationship between capitalization and loan to deposit?

1.6 RESEARCH HYPOTHESIS

Baridam (2001) defines the hypothesis of a tentative answer to this problem. The following hypotheses be drawn from the objectives and be verified in the course of this research and identified a null guide us in seeking a solution to the problem induced in this research.

HO: There is no significant relationship between capitalization and liquidity ratio of banks in Nigeria

HO: There is no significant relationship between capitalization and loan to deposit?

1.7 Definition of 'TERMS

Bank recapitalization: The act of providing long-term funds of the bank's owners to comply with the requirement of the monetary authority. Osiegbu (2005).
Consolidation: The reduction in number of banks and other deposit taking institution with a simultaneous increase in the size and concentration consolidation of entities in the sector (BIS, 2001:2)
Merger: The combination of two or more independent companies into one company
Acquisition: It is when a company takes care of the interests controlling stake in another company

1.8 ORGANIZATION OF STUDY

The research work consists of five chapters as follows:

CHAPTER I: consists in the introduction, approach to the problem, the purpose of study, research questions, research hypothesis, the importance of the study, limitations of the study, organization the study and definition of terms.

CHAPTER TWO: This section consists of reviews of relevant literature renowned authors in the field this study.

CHAPTER THREE: This section is the methodology chosen by the investigator of the study. It involves research design, the procedure Sampling, data collection, operational measure of the variables, and data analysis technique.

CHAPTER IV: This consists of a presentation alive and analysis of data collected from relevant sources to the study.

CHAPTER FIVE: This is the last section of the work and consists of discussion, conclusions and recommendations made by the researcher.

CHAPTER TWO

2.0 THE CONCEPT OF CAPITAL BASE

The recent call for the recapitalization of the banking sector has raised many discussions among bank regulators, promoters and depositors as if propping the bank's capital base is a new phenomenon in Nigeria. Historically, the failure of pioneer z1930 and 1940, led to the enactment of the Banking Ordinance 1952. Ordinance Banking, 1952 prescribes an operating license and emphasized the minimum capital for all banks (Onoh, 2002: 321). Since then, the increase in capital the bank has become the hallmark of policy responses to the Monetary Authority of Nigeria.

The capitalization is an important component of reforms in the banking sector due to the fact that a bank with a strong base of capital has the ability to absorb losses arising from liabilities unprofitable (NPL). The achievement of capitalization achieved through consolidation, convergence, and the capital market. Thus, banking reforms are primarily driven by the need to achieve the objectives of consolidation, competition and convergence. (Deccan Herald, 2004) in the financial architecture.

2.1 POSITION BEFORE THE BANKING SECTOR

CONSOLIDATION

There exist eighty-nine (89) predominantly in banks urban centers in June 2004, which is characterized by structural and operational weaknesses of the low capital base. Predominance of a few insolvent banks and lack of liquidity dependence public sector deposits and foreign currency trade. Poor asset quality, weak government co-operate, a low confidence of depositors. Banks that did not come to support the real sector of the economy in 24 percent of GDP compared to the African average of 87 and 272 percent for developed countries.

In addition, vision of consolidation, among others, increasingly includes financial hub of Africa and the CBN as one of the best in the world. Within ten years, the Bank of Nigeria (s) must be between 50 0f the 100 banks in the world. Facilitate the development of a strong of an engraving and sound banking system. Improving transparency and accountability in the sector. Follow the cost structure of banks and make them more competitive and development-oriented. A new banking system depositors and investors can trust can trust to mark the beginning of a new economy.

2.1.1 THE CONSOLIDATION OF THE REFORM AGENDA

Recapitalisation of banks to 25 billion naira share holders funds to December 31, 2005.
- Zero tolerance in misreporting and strokes.
- Strict observance of corporate governance principles.
- Policy framework on risk management systems.
- Strengthening systems of risk management in banks.
- Risk-based supervision.
- Payment system reforms.
- A collaboration more closely with the Economic and Financial Crimes Commission (EFCC) in the creation of the Financial Intelligence Unit (FIU) and the implementation of measures against money laundering.
- Some elements of reform, a strengthened Universal banks.

2.2 Benefits of consolidation

The consolidation program has fundamentally changed the nature of competition in the banking sector in Nigeria. Through the new minimum capital requirement, the number of banks in the country has successfully reduced eighty-nine to twenty-five. The policy also effectively raised barriers to entry for those wishing to begin banking business (Osubo, 2006.5).

There are many benefits of cleaning up the banking sector in Nigeria, and Nigerian banks can earn much from them. Some of the benefits are

Emergence of 25 banks through consolidation (compared with 89 banks before consolidation). The success of the banks accounted for about 93.5% of the aggregate deposits
focus more efficient control in a smaller number (25) 89 banks rather than banks in most patients. No more banks total regional / ethnic-based
Strong capital is an indication basic solvent and it will take a risk with long neglect of any of the newly capitalized banks walking their way to insolvency
He Consolidation is a way to remove weak banks in the system in an orderly manner
The consolidation improve profitability and operational efficiency of banks.
The expansion of the shareholder base of the banks in Nigeria, thus eliminating the phenomenon of "family bank" and the tendency to poor governance corporate.
The Nigerian economy will be stronger and better capitalized to fund development projects in the long term in various areas of the economy and businesses.
The banks also invest in infrastructure development, business a good business and also support entrepreneurship.
The banks invest heavily in training and labor. (Osubo, 2005).
Improved liquidity and stock market capitalization
total capitalization of banks as a market capitalization increased from 24% to 38%.

2.4 The concept of consolidation

Consolidation is seen as reducing the number of banks and the adoption of other depository institutions with a simultaneous increase in the size and the concentration of institutions of consolidation in the sector (BIS, 2001:2). It is mainly motivated by technological innovation, deregulation of services financial intermediation improved and a greater emphasis on shareholder value, privatization and international competition (Berger et al, 1991; From Nicole et to … 2003: IMF, 2001).

The consolidation process has been held to improve the efficiency of banks by reducing revenue costs in the long term. It also reduces the risk of the industry of weak banks by the disposal and acquisition of smaller banks by big and strong, and creates opportunities for greater diversification and financial intermediation.

The pattern of consolidation in the banking system could be viewed from two different perspectives, namely, strengthening market-driven and directed by the Government. Market consolidation and propulsion is more pronounced in developed countries see the consolidation as a way to expand competitiveness with added advantage in the global context and to eliminate excess capacity more efficiently than bankruptcy or any other means of exit.

In addition, the government-driven consolidation arises from the need to solve the problem of financial difficulties in order to avoid systemic crisis and to restrict inefficient banks (Ajayi, 2005:2). One of the general effects consolidation is to reduce the number of players, moving the industry closer to an oligopolistic market (Adedipe, 2007:37).

2.4 THE REASON FOR CONSOLIDATION

The inability of the banking system in Nigeria to undertake voluntary consolidation in line with the global trend has forced the need to consider adopting an appropriate legal framework and supervision as well as a comprehensive package of incentives to facilitate consolidation in the banking sector, both as a crisis resolution option and promote strength, stability and efficiency of the main organ of regulation of banks in Nigeria (Soludo, 2004:4).

The main objective of the banking system is to ensure price stability and facilitate rapid economic development. Unfortunately, these objectives have remained largely unreached in Nigeria because of some deficiencies.

These include:

Technological album: A bank wishing to improve operations, but limited by its inability to easily access the technology may be driven in the merger with another that has the technological advantage over it
The desire for growth: a merger agreement can be made by a bank for exploiting the other bank desire for growth.
Misclassification of number of banks: While the banking system in Nigeria is, on average, have given satisfactory results, a detailed analysis of the status of individual banks, to December 2004 showed that no bank was rated very good to only 10 were considered satisfactory sound 51, 61 marginal, low solid 10. (Imala, 2005 pp: 27).
Low Capital base: the average capital base of Nigerian banks is U.S. $ 10milion, which is very low compared with banks in other developing countries like Malaysia, where the capital base of the smallest bank in U.S. $ 526million. Similarly capitalization if the global banking system in Nigeria 311million naira (U.S. $ 2.4million) is extremely low relative to the size of the Nigerian economy and in relation to the capital base of U.S. $ 688billion for a single banking group in France U.S. $ 541billion for a bank in Germany. (CBN 2005: 17)
Stock exchange quotation: Business combination could be motivated by the desire to official listing. In this case, the bank can not meet the requirement the stock market, but desirous of publicly traded can be integrated with another bank in order to achieve their goal.
Increased Market Share: Consolidation (M and acquisitions) may be required by the hope that banks have similar line of products to expand its market share after the merger.

Also of the shortcomings above, the Nigerian banking system has the following operational problems:

Weak corporate governance, evidence of inaccurate and Failure to comply with regulatory requirements, ethics and declining gross domestic abuse resulting in huge arrears insider related credits.
- Excess dependence on public sector deposits and currency trading and the abandonment of small and medium scale private savers. (Imala, 2005:27)

2.5. Bank of consolidation through mergers and acquisitions

The consolidation was achieved through mergers and acquisitions. Fusion is the combination of two or more independent companies into one company. The company that results of the process may take any of the following identities: The objective acquirer or new identity.

Acquisition by contrast, occurs when a company takes over the control shareholding of another company. In general, the end of the process, there are two separate entities or businesses. The company became the target is a division or a subsidiary of the acquiring company (Pandey 1997:885).

While consolidation mergers and acquisitions involving banks, convergence involves the consolidation of banking and other financial services such as securities and insurance (FRBSF Economic Letter, 1998).

Anecdotal evidence indicates that the most common form of mergers and acquisitions in the financial services industry involves national firms competing in the same segment (for example, one bank to another). The second most common type of merger and acquisition transactions involving companies different national segments (eg insurance companies, bank). and cross-border mergers are less frequent acquisition particularly business participation in the various segments (Roger Ferguson Jr., 2002).

2.5.1 Approval under mergers and acquisitions

Before any bank can say that consolidation through mergers and acquisitions in the industry of Nigeria, first, must seek and obtain approval of the following regulatory and supervisory authorities in the industry. These include the Securities and Exchange Commission (SEC), the Central Bank of Nigeria (CBN), Nigeria Stock Exchange (NSE) and the Corporate Affairs Commission (CAC). (CBN 2004).

2.5.2 PROCEDURES FOR OBTAINING THE APPROVAL OF MERGERS AND ACQUISITIONS

The Company and Allied Matter Act (CAMA 1990) and investment and the Securities Act (ISA 1999) to facilitate the provision of making primary legal mergers and acquisitions in Nigeria. This provision grants the right to review and give their approval to the Securities and Exchange Commission (SEC). Before granting approval, The SEC believes that the effect of the proposed transaction in the competitive environment, in order to ensure that the transaction does not restrict competition or create a monopoly. The procedure or process for approval of mergers and acquisitions involving four (4) basic steps:

Fill a notification Pre-Merger/Acquisition
Fill a formal request for approval of

Proposed merger / acquisition.

Keep Meetings court order
Meet the post-approval requirements

2.6 THE ROLE OF THE SEC, CBN, NSE, and ACC and regulatory authorities mergers and acquisitions

Securities and Commission (SEC):

The law provides that every Nigeria merger, acquisition or business combination between companies or between companies will be subject to prior review and approval of the Security and Exchange Commission (SEC), (1999:599 ISA (2). Paragraph 3 of Article 99 the Commission must approve any application under that section if and only if the committee feels "It is not likely to cause substantial competition or a tendency to create a monopoly in any line of business of the company" or "use of themselves through voting or granting of powers. "It should be noted that both mergers and acquisitions require the approval of the SEC in the monopoly. It should be noted that consideration monopoly is a matter before the merger. No need to trade through the process of merger, if at the end or in the middle of the SEC process to oppose the adoption of the basis that the combination inhibits competition. It is therefore important to seek prior approval to the merger must SEC. The application for approval prior to the merger should include information on the history and business of combing business and its market.

In addition to the pre-merger approval on issues relating to monopoly, the SEC must approve the plan after a court session and meetings of the court sanctioned. SEC's role in this sense is very different from the prior approval of the merger. SEC steps in this "art" of their traditional role of regulation to ensure compliance by parties to the disclosure and corporate governance governance requirement of the law. SEC's role is not to be a participant, but to create an enabling environment for the parties to play in case market conditions.

Central Bank of Nigeria (CBN) Approval:

Banks and other institutions Financial Law (Bofid) 1991 CBN Act 1991, the CBN has enormous powers to regulate banks, including the approval of the consolidation of banks and changes in the structure and management of any bank. It follows that, in view of the world powers of the CBN, it is recommended that prior approval to the merger of CBN obtained before beginning of the consolidation process. Prior approval to the merger of mergers and acquisitions, would be required to undergo three stages of approval namely the pre-merger consent of the CBN, the approval – in principle, and final approval. Furthermore, it is imperative that the CBN approval was sought and obtained the document regime, the shareholders agreement, the new memorandum and articles of association under agreements to shareholders, if necessary.

During the application process, all structural management measures would be subject to approval by CBN. These include the reorganization, rationalization of staff, approval of the name, streamlining branch, office head

Nigeria Stock Exchange (NSE) Approval:

The approval of the Stock Market Nigeria is needed if the merged company is to be a corporation and individual trading on the stock market or some of the merging companies are listed on the exchange. During the melting period, the NSE is a place of parties listed on the merger or the suspension technique to prevent unfair trade and protect businesses.

CORPORATE AFFAIRS COMMISSION (CAC) ADOPTION:

Essentially, from a legal standpoint the CAC has been limited to a ministerial function when mergers and acquisitions.

What is the custodian of business records, the majority of both processes end with the CEC for its safe custody. This is done through returns legal. The certificates of incorporation will eventually returned and issued for a new merged company. Social capital may have to increase substantially. In addition, yields for the award will be presented. Some of these processes involve payment of large sums of registration fees and fees for filling. It is therefore imperative that these costs are expected.

Although ACC is a purely ministerial role in the regulation of mergers and acquisitions, improving its technology and some service delivery means that is better able to follow the defaulting companies and this may delay the process for companies involved in the merger process which yields in the ACC is not far. companies may have to pay unpaid fines.

2.7 CHALLENGES BANK CONSOLIDATION

The challenges identified in this research cut across the banks, their shareholders, bank employees and other stakeholders in the banking sector.

It is well established that the way to improve efficiency in any industry to promote competition among operators. This is evident in two key growth sectors Nigeria's economy, aviation and telecommunications in the past one decade (Adedipe 2005:37). A major challenge of bank consolidation is the way to encourage competition with less mega banks.

Certainly can not but be more competitive. There is, however, on the other side of the argument, which considers the number and the proliferation of bank branches. The smaller number of banks is likely to be pressured to expand further in search of business opportunities through aggressive brands hitherto unexplored territories. (Luna, 1998).

There is ample evidence that this is the address emerging banks in Nigeria is likely to continue, indications through raising capital in the presentation of information. International evidence on consolidation of banks also confirms this, except that is more in the context of acquisitions Boarder Cross (Hughes, Lang, Master and Moon, 1998).

One of the supposed benefits of consolidation (Larger banks) is indeed challenging and efficiency. The argument has been that larger banks may not necessarily be more efficient filter or, if not have no incentive to improve efficiency in the field of limited competition. Banking observers have noted that Nigeria's major banks (perhaps by increasing in the number of customers) have slipped back to their old habits before the arrival of the new generation banks. Available empirical evidence Hughes et al (1998).

Another major challenge is strengthening capacity building for risk management for both regulators and operators. The two groups the banking system need to improve their risk management skills and acquire new ones in fact, covering the ground three of hazard recognition, evaluation and monitoring (Adepide, 2005:41).

2.8 INVOLVEMENT OF CONSOLIDATION ON THE BANKING INDUSTRY

The Central Bank's directive that banks should increase their capital base to the tune of N25 billion several implications for both the banking sector and the Nigerian economy in general. These consequences are as follows: on the banking industry, the consequences can be categorized into two parts namely, brand and structural implications.

2.8.1 BRAND IMPACT: With regard to the industry implications of new institutions coming from the dust of consolidation will have to deal with the brand-related issued such as:

There will be a name change if two or more banks get together and choose not to adopt any of the names of the participating bank.
The logos were officially used by each of these banks will be removed and adopted another.
It will also be the development of a new culture mark for emerging banks after the consolidation.

The brand message of banks will also be changed.

The place of information and communication technology (ICT) in the bank will be changed, ie, software for banks and new banks will go for the best for meet client expectations.

2.8.2 IMPACT STRUCTURE: The recapitalization of banks are left in their wake, a number of issues structural have a direct impact on staff, customers and the banking sector. They include:

The reduction in the number of banks in the country
The closure of many small banks, especially those in rural areas with poor capital deposit.
Increased competition due to better performance of incentives and services of banks.
Acquisition of digestive issues including loss of jobs, the consolidation of branches and combating inefficiency and bureaucracy. The reconstitution of the directors and the banks.

Source: THE NIGERIA BUSINESS INFORMATION

2.9 PERSPECTIVE OF BANKS After consolidation

The initial public offering banks through capital market when completed is likely to increase the level of financial deepening as evidenced by the increase in volume and value of trade in the stock market.
The banking sector reform has been able to attract more foreign investment entry, especially in the field of portfolio investment, which if sustained development boost the level of economic development especially to the non-oil sector activity.

The consolidation of banks can attract a significant level of the entry of foreign banks in Nigeria, which will become a feature of the industry over time. This will bring more trust in the community international banking sector thus attract more foreign investment in the country. As the increased level of financial intermediation, the interest rate may drop and increase lending to the real sector to generate employment and boost growth.

CHAPTER THREE

3.0 METHODOLOGY

The first two chapters of this research have dealt extensively with the introduction and literature review on the subject and matter. It is now necessary to describe how research is conducted.

Methodology refers to the methods and procedures carry out the study. Includes research design, sample procedure, questionnaire design, data collection and analysis technique data.

DESIGN 3.1 Research

It is the framework for a study to be used as a guide to collecting and analyzing data. This research will use the descriptive research design while researching the subject of research. THE EFFECT OF THE CONSOLIDATION OF BANK PERFORMANCE OF BANKS IN NIGERIA.

They also refer to a set of instructions to do something that leaves details to be worked out. According Okwandu (2004) design aterm is used to describe a number of decisions to be taken in relation to the collection of data every time before the data are collected.

3.2 Data method collection

Data collection involves obtaining information relevant to the main idea of the research questions / hypothesis of the study to confirm whether they are true or not. According to Olaitain et al (2000), which is the systematic way of obtaining information, the factual evidence or observation to answer the specific research question or hypothesis tests for an investigation. Basically there are two data types. These are: primary and secondary data. Primary data are data from original source or for a specific purpose. While secondary data are collected from existing ones. Secondary data used in this study. Secondary information was obtained from CBN statistical bulletin and annual report.

3.3 OPERATIONAL MEASURES OF VARIABLES

In the research, the independent variable and dependent are eligible for an equation called regression equation that data is to express the relationship between variables. The simple linear regression analysis is used to analyze the hypotheses.

In one scenario, the functional relationship was postulated between the capital base () bindings (X) and (performance) liquidity ratio Nigerian banks (Y).
The hypothesized relationship is between the two (capital base) Consolidation (X) and (performance) loan ratio to deposit (Y).

To express the simple linear regression model in equation form is:

Y = A + bx

Where Y = Dependent variable

a = parameter of intersection (where the regression surface cuts the y-axis)

b = slope of the regression line (Which is the rate of change in Y with respect to X)

X = Independent variable

3.3 Analysis of TECHNICAL DATA

In this study, parametric tests were used. The statistical technique to use is the correlation coefficient, which is often referred to as the moment Pearson product correlation coefficient, the correlation coefficient is calculated using the following formula:

r = n () – ()

The correlation coefficient tells us that the nature of the relationship between the dependent and independent.

It was originated by Karl Pearson around 1900, correlation coefficient describes the strength of the relationship between two sets of objects of value. You can take any value from -1.00 to 1.00 inclusive. A correlation of -1.00 to 1.00 indicates perfect correlation.

If there is absolutely no relationship between the two sets of objects Pearson r value is zero. A ratio r correlation near zero indicates that the relationship is quite weak.

The correlation coefficient can be defined as a statistic often used which not only provides a measure of how random variables are associated in a sample, but also has properties that closely relates to its straight regression. It also could be defined as a statistical technique that determines the strength of the linear relationship between two variables.

In addition, you can stated as a measure of strength of the linear relationship between two sets of variables.

The correlation coefficient tells us whether the relationship is really significant. For this, the researcher uses the + – test to see if the relationship is significant. + Formula – to look at is:

t = with n – 2 degrees of freedom.

We will use the two-tailed test at 0.05 level of significance. The 0.05 level of significance for rejection of the null hypothesis, a researcher who is willing to accept the probability that it is most likely less than five hundred, that the observed difference is due to sampling error. Therefore, the probability of making a an error rate is less than 0.05.

About the Author

ESEOGHENE IGBERAHARHA. department of finance and banking, university of port harcourt, choba Rivers state.

This entry was posted on Tuesday, July 27th, 2010 at 3:53 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

My Legal Spot
Legal Resources for Attorneys and Law Students

Recent Posts