This study was carried out to assess the performance of commercial bank in post consolidation era. It specifically analysed the pre-consolidation financial performances, analysed the post-consolidation financial performances and determined the extent to which banking industry consolidation improves the key profitability ratios of the banks.
The scope of the study cover four (4) commercial banks listed in the Nigeria Stock Exchange for the period of 10 years- 2001-2005 and 2014-2018. The selected banks were United Bank for Africa Plc (UBA), First Bank of Nigeria Plc (FBN), Zenith Bank Plc (ZB) and Guaranty Trust Bank Plc (GTB). Data were obtain from secondary sources such as Annual Reports of Selected Banks, Website of National Bureau of Statistics, CBN website, Journals and the websites of the selected banks. This employed the equality of the mean of the key profitability ratios using t-test statistic. Paired Sample Statistics was employed to determine the difference between the performance evaluation variables (Net Profit Margin – NPM, Return on Assets – ROA and Return on Capital Employed – ROCE) before and after consolidation.
Findings from the study depicts that there was statistically significant difference between pre-consolidation financial performance and the post consolidation financial performance of banks in Nigeria and there was significant difference between the pre consolidation Net Profit Margin and post consolidation Net Profit Margin. The implication of this is that the financial performance of the post consolidation era is better than that of pre consolidation era.
It was concluded that there was a significant improvement in the performance of banks after consolidation but it was discovered that one of the three profitability variables (ROA) showed insignificant difference.
Among other recommendation is that in order to discourage unethical practices on the part of the banks and their managements, the Central Bank of Nigeria (CBN) and other regulatory bodies should turn their searchlights on the Nigerian banking industry, so that the megabanks would not begin to perpetuate financial crimes to generate jumbo returns from the enormous funds available to them.
TABLE OF CONTENTS
CHAPTER ONE: Introduction
1.1 Background to the study
1.2 Statement of the Problem
1.3 Objectives of the Study
1.4 Research Questions
1.6 Significance of the Study
1.7 Scope of the study
1.8 Limitation of the Study
CHAPTER TWO: Literature Review
2.1 Conceptual Review
2.1.1 Definition of the Concept of Bank Consolidation
2.1.2 The Concept of Bank Capital
2.1.3 Bank Consolidation through Recapitalization
2.1.4 Bank Consolidation through Mergers and Acquisitions
2.1.5 Consolidation Strategy of the CBN and the Emergence of Mega Banks in 2006
2.1.6 Financial Performance
2.2 Theoretical Review
2.3 Empirical Review
CHAPTER THREE: Methodology
3.1 The Research Design
3.2 Population for the Study
3.3 Sample Size and Sampling Techniques
3.4 Sources of Data
3.5 Re-statement of Hypotheses
3.6 Model Specification
3.7 Method of Data Analysis
CHAPTER FOUR: Data Presentation, Results and Interpretations
4.2 Test of Hypotheses
4.3 Discussion of Findings
CHAPTER FIVE: Summary, Conclusion and Recommendations
5.1 Summary of Findings