AN EXAMMINATION OF THE TECHINQUES OF MANAGING FINANCIAL DISTRESS IN THE NIGERIA BANKING INDUSTRY

ABSTRACT

This paper investigates the effective techniques for managing financial distress in the Nigerian banking industry. Financial distress, often marked by insolvency, liquidity challenges, and high operational costs, has been a recurring problem among Nigerian banks. The study focuses on key strategies such as debt recovery, cost reduction, bank recapitalisation, acquisitions, and mergers. Through structured questionnaires and interviews with bank staff and regulatory bodies like the CBN and NDIC, the research highlights the practical implications of these approaches. Statistical tools such as chi-square analysis and simple percentages were used to analyse the collected data. Findings reveal that recapitalisation significantly strengthens a bank’s capital base, enhancing its stability and public confidence. Mergers and acquisitions provide a path for distressed banks to regain viability, while cost control and efficient debt recovery are vital in maintaining profitability. The research underscores that poor management, excessive administrative costs, and bad debt accumulation are major drivers of bank failure. It concludes that regulatory intervention, strategic restructuring, and stakeholder cooperation are key to resolving distress. The study offers vital recommendations to guide policymakers, bank executives, and financial analysts in managing systemic risks within Nigeria’s banking ecosystem.

Keywords

Bank distress, Nigerian banking industry, debt recovery, bank recapitalisation, mergers and acquisitions, cost reduction, financial management, insolvency, loan default, CBN, NDIC

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CHAPTER ONE

INTRODUCTION

BACKGROUND OF THE STUDY

STATEMENT OF THE PROBLEM

OBJECTIVE OF THE STUDY

RESEARCH QUESTION

RESEARCH HYPOTHESIS

SIGNIFICANCE OF STUDY

SCOPE, LIMITED AND DELIMITATIONS

DEFINITION OF TERMS

REFERNCE

CHAPTER TWO

REVIEW OF RELATED LITERATURE

INTRODUCTION TO EXAMINATION OF THE

TECHNIQUES OF MANAGING FINANCIAL

DISTRESS IN THE NIGERIAN BANKING INDUSTRY.

BANKING RECAPITALIZATION

THE ROLE OF CAPITAL IN BANKING

COMPONENTS OF BANK CAPITAL

MAJOR OPTIONS IN BANK RECAPITALISATION

FOREIGN INVESTMENT OPTION IN BANK RECAPITALISATION

DEBT RECOVERY AND COST REDUCTION

LOAN RECOVERY STRATEGIES

BANK AQUSITION AND MERGER

RESTRICT AND SELL OPTION

REFERENCE

CHAPTER THREE

RESEARCH DESIGN AND METHODOLOGY

RESEARCH DESIGN

METHODS OF INVESTIGATION

RESEARCH POPULATION

SAMPLING SIZE DETERMINATION

SAMPLE TECHNIQUES

RESEARCH INSTRUMENT USED

METHOD OF PRESENTATION

TECHNIQUES OF DATA ANALYSIS

CHAPTER FOUR

PRESENTATION OF DATA AND ANALYSIS

DATA PRESENTATION ANALYSIS

TESTING OF HYPOTHESIS

CHAPTER FIVE

FINDINGS, CONCLUSION AND RECOMMENDATION

FINDINGS

CONCLUSION

RECOMMENDATION

BIBILIGRAPHY

APPEDIX

LETTER TO THE RESPONDENTS

QUESTIONNAIRES

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