Impact Of Universal Banking In Nigeria

852 Words2 Pages
bulb-icon

Recommended: The emerging scenario of mergers and acquisitions in the banking sector

The Nigerian banking and financial services competitive environment has changed radically. From the heydays of the financial services and banking boom of the 1990s, when the country was dotted with over 200 financial institutions – commercial banks, merchant banks, community banks, mortgage banks, finance houses - to the new dispensation in which the country progressed fully into the era of universal banking with 24 banks operating in the country (Sanusi, 2012). The faltering Nigerian economy and the banking industry experienced a systemic crisis in 2009, triggered by the global economic crunch, which was followed by the collapse of the Nigerian stock market. After the stock market collapse of 2009, during which 70% of value was eroded, many The UB model allowed banks to diversify into non-bank financial businesses. The UB model was introduced in 2001 as part of a comprehensive reform and consolidation programme by the Central Bank of Nigeria (CBN) under the leadership of the erstwhile Governor of CBN, Professor Charles Soludo. As a result, Nigerian banks were consolidated through mergers and acquisitions, with the minimum capital base raised from N2 billion to a minimum of N25 billion. This policy reduced the number of Nigerian banks from 89 to 25 in 2005, and later to 24 (Sanusi, 2012; CBN Economic Report, 2013). One of banks that obtained the universal banking licence is FCMB – First City Monument Bank Under the new model, licensed banks were authorized to carry out the following types of businesses: commercial banking (with regional, national and international reach); merchant (investment) banking; specialised banking (microfinance, mortgage, non-interest/Islamic banking); and, development finance (Sanusi, 2012). In response to this changing and evolving climate, an attempt to elevate HR’s perceived value to banking business emerged. Banks began to explore innovative strategies to attract professional and highly driven executives; this was in addition to massive manpower development programmes to re-train existing

Show More
Related

  • Lincoln Savings and Loan Crisis and the Keating Five

    2586 Words  | 6 Pages

    The Savings and Loans Crisis of the 1980’s and early 90’s created the greatest banking collapse since the Great Depression in 1929. Over half the S & L’s failed, along with the FSLIC fund that was created to insure their deposits.

    Read More

  • America, the Great Depression, and The Cinderella Man

    1787 Words  | 4 Pages

    Banks failed due to unpaid loans and bank runs. Just a few years after the crash, more than 5,000 banks closed.... ... middle of paper ... ... Print.

    Read More

  • Impact of the Great Recession in Texas and the Rio Grande Valley

    2714 Words  | 6 Pages

    report of the national commission on the causes of the financial and economic crisis in

    Read More

  • Case Analysis: RL Wolfe

    3133 Words  | 7 Pages

    Ulrich, D., Younger, J., and Brockbank, W. 2008. “The twenty-first century HR organization.” Human Resource Management, 47, pp.829-850.

    Read More

  • Citicorp Case Analysis

    1453 Words  | 3 Pages

    By the mid-1980s, US commercial banks were subject to primary capital requirements set by the SEC, OCC and FDIC while US securities firms were subject to the SEC's Uniform Net Capital Rule (UNCR).

    Read More

  • Case Study: The Innovating Career: Human Resources

    1000 Words  | 2 Pages

    As jobs are becoming more technical every year and innovations are arising with new job opportunities, finding employees that meet a business’ requirement is becoming more difficult (Nickels (290-346). This is why it is important to have a career that arises and evolves that meets this innovating world: Human Resources. Human resources plays a big part into a business’ success from hiring new employees, to employee retainment, and ensuring employees are trained to meet the evolving businesses requirements (Nickels (290-346). Human Resources is quickly evolving to become one of firm’s most critical professions in the industries market business.

    Read More

  • Sainsbury's Marketing Strategy

    1440 Words  | 3 Pages

    “Hr is shifting from focusing on the organisation of the business to focusing on the business of the organisation” (Zulmohd 2011). David Ulrich points out four distinctive roles of HR which makes the organisation most effective and produce competitive advantage. He planned to change the structure of HR function and build HR around roles. The four key HR roles identified by Ulrich, one HR business partner/strategic partner – aligning HR and business strategy which plays an important role in setting strategic direction. It builds strategic relationship with clients and strategically manages the development of the workforce. The second key role is administrative expert which creates and must deliver effective HR processes made to tailor business needs. It also involves managing people and HR related costs. To continue to the third key role, change agent which understands the organisations culture, and takes the responsibility to communicate those changes internally and gain its employees trust. The final key role identified by Ulrich is employee advocate which is a core in HR role represents employees and helps to improve their experience, protect employees’ interests and confirm strategic initiatives are well balanced. Employee advocates must also “ensure fair, ethical and equitable people processes and practices.” “David Ulrich’s HR Model is about defining the HR roles and

    Read More

  • Unemployment In The 1930s Essay

    515 Words  | 2 Pages

    During the 1920s about 600 banks failed each year (Luke, 2009). No one was terribly concerned because these banks were not very large they were just rural banks. Investors and other businessmen thought that the reason these banks failed was because they were poorly managed and or just weak banks compared to large corporate banks. Some even believed that these bank failures would help strengthen the banking system. However, when the 1930s came around the problem became worse. Imagine working hard and saving enough money so that a new house, or a new Ford Model A, can be purchased. Then one day the money is just gone with no explanation. In 1930 approximately 1,350 banks were closed due to financial difficulties, while others were placed into receivership (Luke, 2009). Within the first four years of the 1930s about 10,000 banks closed. Due to these bank closures people became unemployed, which led to them losing everything. Bank closures in the 1930s caused the wealthy to lose their assets, which resulted in numerous suicides.

    Read More

  • Should CIBC Merge With Barclay?

    1976 Words  | 4 Pages

    The early decades of the nineteenth century saw the establishment of banks in the Caribbean largely as a convenience for the local governments. Throughout much of the nineteenth century, most Caribbean banks operated as an oligopoly with limited government influence – this directly translated into higher profits. However, over time, the banking environment could best be described as complex and dynamic. Competition increased, resulting into greater need for improved customer service, product innovation and cost reduction strategies. In order to achieve this, the banking sector was undergoing major structural reforms characterized by mergers and acquisitions. On July 23, 2001 Barclays and CIBC announced that they were in advanced discussions which were intended to lead to the combination of their retail, corporate and offshore banking operations in the Caribbean.

    Read More

  • Analysis Of UCB Banking

    1482 Words  | 3 Pages

    ...adoption of UCB banking must get start from improving the usability and reducing the perceived risk.

    Read More

  • Case Study Of The Rio Tinto Company

    855 Words  | 2 Pages

    " This global London-based mining and mineral company was severely impacted by the global recession in 2008. Such an impact forced unprecedented workforce reductions worldwide and decentralized HR management had to be brought in under a single umbrella to ensure an orderly and efficient system that would support the organization’s future productivity."( Case Study OneRedesigning HR HRMG 5000 - Student Simple). Human resources have a strategic significance if managed efficiently and productively. The company revamped and managed its HR functions in a manner so as to achieve the strategic goals of the

    Read More

  • A Comprehensive Overview and An Analytical Insight Into Human Resource Management at Barclays Bank Plc

    2725 Words  | 6 Pages

    A Comprehensive Overview and An Analytical Insight Into Human Resource Management at Barclays Bank Plc

    Read More

  • Global Financial Crisis Case Study

    1479 Words  | 3 Pages

    The Global Financial Crisis (GFC) led to the collapse of many leading financial institutions in the USA and Europe in 2007 and 2008. This was caused mainly due to subprime lending, which in simpler terms mean that many of these financial institutions were unable to repay their creditors and depositors due to reduction in the value of their assets they were holding. Without getting into the details of how the financial crisis occurred due to some other factors such as subprime mortgages and property price appreciation, we can say that during this period there was a massive loss of confidence in the financial system globally, which not only affected the foundations of the economy of a country but also harmed the social and political structures of many of those countries affected directly or indirectly (Zagelmeyer and Gollan, 2012). This lead to the increase in demand, rise in unemployment, more debts and whole lot of other social and economic concerns for companies and governments. The relation of this crisis with human resource management (HRM) is relevant because it ultimately affects the way people are managed within organizations. As mentioned by many authors like Gunnigle et al (2013); Edwards & Rees (2011), the key functions of a human resource manager (HR) role is understood to be managing employees, such as recruitment, selection, pay and benefits, industrial relations and the HR function. The approach they take, the policies they implement and the practices they employ are what contribute to employment and unemployment figures. There are a number of factors that affect how the HR department acts, whether they change or implement new practices, as a result of the global financial crisis. Another issues at hand is that, it ha...

    Read More

  • Bank Failure In Jamaica Case Study

    1262 Words  | 3 Pages

    The bank failure in Jamaica illustrates how negative mindsets and behaviors can devastate the financial system and disrupt economic growth. The primary role of any bank is to safeguard its customer’s money, offer interest rate on deposits, lend money to creditworthy individuals, and make sound investment decisions to maximize shareholder value. Because of rapid economic growth between the late 1980s and early 1990s in Jamaica, the Central National Bank (CNB) and Worker’s Savings and Loans Bank (WSLB) loosened their monetary policies, provided preferential interest rates and extended credit beyond what was reasonable to members of its own board of directors, managing directors, and officers of the bank. These actions posed significant risks to the bank and its future.

    Read More

  • Role Of Financial Sector In The Banking Sector

    1366 Words  | 3 Pages

    Banks sector is playing an important role in economies. The banking industry, as the classic and the most influential of financial intermediaries, facilitates economic operations. Financial sector in the worldwide country has been changes over these years by looking the changes of financial structure environment and economic conditions. Thus, banks are a very important point to financial system and play an important role as control and contribute growth to the economic sector.

    Read More

More about Impact Of Universal Banking In Nigeria

Open Document