AN EMPIRICAL ANALYSIS OF COMMERCIAL BANKS LIQUIDITY PROBLEM

(A CASE STUDY OF FIRST BANK AND UNION BANK)

TABLE OF CONTENT

TITLE PAGE

APPROVAL

DEDICATION

ACKNOWLEDGEMENT

LIST OF TABLE

TABLE OF CONTENTS

ABSTRACT

CHAPTER ONE

1.0     INTRODUCTION

1.1            BACKGROUND OF THE STUDY

1.2            STATEMENT OF PROBLEM

1.3            OBJECTIVE OF STUDY

1.4            RESEARCH HYPOTHESIS

1.5            SIGNIFICANCE OF THE STUDY

1.6            SIGNIFICANCE OF THE STUDY

1.7            SCOPE AND LIMITATION OF THE STUDY

1.8            BACKGROUND OF THE FIRM STUDY

1.9            DEFINITION OF TERMS

CHAPTER TWO

2.0            REVIEW OF RELATED LITERATURE

2.1     OPERATIONAL CONCEPTS IN NIGERIA COMMERCIAL BANKS.

2.2     LIQUIDITY RATIO

2.3    SIGNIFICANCE OF LIQUIDITY RATIO

2.4    COMPUTATION OF LIQUIDITY RATIO

2.5    CASH RATIO

2.6    LIQUIDITY RISKS

2.7    LIQUIDITY MEASUREMENT

2.8    DETERMINING LIQUIDITY NEEDS

2.9    RATIONAL FOR LIQUIDITY RATIO REQUIREMENTS

2.10       FACTORS AFFECTING LIQUIDITY  OF COMMERCIAL BANKS

2.11       LIQUIDITY PROBLEMS OF COMMERCIAL BANKS

2.12       CAUSES OF LIQUIDITY PROBLEMS IN COMMERCIAL BANK

2.13       FEDERAL GOVERNMENT STEPS TOWARDS SOLVING LIQUIDITY PROBLEM IN COMMERCIAL BANK

2.14       APPRAISAL OF THE GOVERNMENT STEPS TOWARDS SOLVING LIQUIDITY PROBLEMS IN COMMERCIAL BANK

2.15       SUMMARY

CHAPTER THREE

3.0   RESEARCH METHODOLOGY

3.1     RESEARCH DESIGN

3.2   AREA OF THE STUDY

3.3   POPULATION OF STUDY

3.4   SAMPLE AND SAMPLING PROCEDURE

3.5   INSTRUMENT FOR DATA COLLECTION

3.6   VALIDITY OF THE INSTRUMENT

3.7  RELIABILITY OF THE STUDY

3.8  METHOD OF ADMINISTRATION OF THE INSTRUMENT

3.9  METHOD OF DATA ANALYSIS

CHAPTER FOUR

4.0   DATA PRESENTATION

4.1  TESTING OF HYPOTHESIS

4.2   ANALYSIS AND INTERPRETATION OF RESPONSES

CHAPTER FIVE

5.0    DISCUSSION IMPLICATION RECOMMENDATION

5.1    DISCUSSION OF RESULTS

5.2   CONCLUSION

5.3  IMPLICATION OF THE STUDY

5.4  RECOMMENDATIONS

5.5  SUGGESTION FOR FURTHER STUDY

5.6  LIMITATION OF THE STUDY

APPENDIX

BIBLIOGRAPHY/REFERENCE

CHAPTER ONE

1.0  INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Liquidity of banks is “the case with which banks assets could easily be converted into cash”. The liquid asset include cash in bank vaults, and other government securities that have not been used as collateral for loans. The most liquid of all these assets is cash.

These are many reasons why a bank should have reasonable liquid assets in its assets portfolio. These includes amongst others to babble the bank to meet prompt demands from deposits and to ensure that the bank main trained public confidence and also beadle to utilize profitable opportunities that may come out in future.

However, it should be mentioned that banks like most other business are profit oriented. They operate in order to make profit for their shareholders. The profits could duly be realized only if there is adequate deposits from bank customers. The deposits will not come unless the depositors could be assured of the safety of their deposits and for the safety of the deposit to be assured, these has to be enough liquidity in the bank.

Conversely, a bank operates in order to make profit for her shareholders. It is a known fact that action designed to make profit in banks may bring about bank distress and vice versa. Therefore, equilibrium has to be sought between the two. These taken extreme cases, have been the constant concerns of bank management.