FINANCIAL DISTRESS IN SOURCE COMMERCIAL BANK REASONED, CONSEQUENCES AND SOLUTION

ABSTRACT

A descriptive study was made about financial distress in some commercial banks using secondary statistics. This research work designed to describe the financial distress in some Commercial Bank in Nigeria.

The study also took at the follow objective such as; nature and types of financial distress facing source commercial banks, the banks involved.

It was also discovered that distress is caused is a result of poor management, insolvency, low asset base inadequacy of capital e.t.c.

Therefore, commendation such as: Inadequate, Funding, Increased assets base, provisions for adequate liquidity.

Also such research should be done to other non-financial banking institution and other West African Country.

PROPOSAL
The basic objective situation under this study was the valuation of financial distress in some commercial banks reasons, issues the consequences and solution

This study has been structured into five (5) Chapters to make for easy reading and understanding

Chapter One dealt with the background of the study, the statement of problem, the objective of the study, the research questions, the scope of study, the limitation if study, the significance, rational, definition of terms and assumption of the study base on the country’s economy.

It also gives an insight into the causes of financial distress in Commercial banks and other Financial Institution.

From this, other four Chapters deserved that base from the chapter one in order to confirm the managing distress in Nigerian Banks, the assessment of tackle financial distress, measure laxtant of distress in Nigeria. More also the sources of data and its limitation and findings.

In view of the findings above, recommendations have been made to help tackle the financial distress in some Commercial Banks in Nigeria.

CHAPTER ONE

1.1 BACKGROUND OF THE STUDY

In Nigerian Banking system considering the last decade the Commercial Banking to be praise had undergone a rapid expansion both in terms of the number of Institution and the scope of financial services rendered.

As bank increasing was liberalized so was the scared of instability sown in these banking system at the sometime.

As these expansion trend continuous, a sign of lacked vision among the investors and the directs motive of quick return to satisfy liquidity operation. The word distress had been in assistance but increased promptly as these institution increased due to acute shortage of resources and the massive withdrawal of deposits by government agencies and other public sectors from these banks.

The development trend the financial structure, exposed and undermine the economic system which impact development of the economy. Therefore, distress places a great burden on regulation, authority, depress the economy undermine the payment system and discourage savings.

1.2 STATEMENT OF THE PROBLEM

Some Commercial banks have been divided to assist in loans and advance to various sectors of the economy.

And the Commercial banking is know as retail banking which accept deposit and makes payment to his customers.

But the financial condition of source of these Commercial Banking due to the political instablility/lactory campaign that wad on. Political analyst describes the allocation to be one of the brutal crises that was to come. Therefore, there was price withdrawal of fund by these bank customers. These Institutes is now bogged down by distress, insolvency, poor liquidity due to deadline in deposit and the confidence. The crisis has been averted and the urgency prompted the study. This research work is disquiet to describe the financial distress in some Commercial Banking System in Nigeria.

1.3 OBJECTIVE OF THE STUDY

The objective of the study are:

1. To describe the nature and types of financial distress.

2. To identify some of the Commercial Banks involved in the distress in Nigeria.

3. To identify the causes of financial distress in these Commercial Banks.

4. To determine the level of distress in these Commercial Banks.

5. To find out if the distress is caused by poor management.

1.4 SIGNIFICANCE OF THE STUDY

The importance of a health banking system cannot be over emphasized for so many reasons, ranging from the vital economic importance of the longe deposit at state to public confidence jobs and career of people and the key role these banks plays in economic development.

Also the benefit of finding solution of how to get a solution of the crisis will be found useful to invest or customers of these banks, the regulatory and supervisory authority and even the Government. The solution will also be useful to the managers in general of these banks.

1.5 FINANCIAL DISTRESS

This is when Financial Institute can no longer cope with their financial structure and require help. This could take various firms like, Insolence. Poor Management, Inliquidity, Lack of deposits. e.t.c.

1.6 COMMERCIAL BANK

This are Financial Institution referred to as retail bank. They accept and make payment on demand to their customers.