The Problem Facing Commercial Banks In Nigeria (a Case Study Of Union Banks Of Nigeria United Banks For African And African Bank

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Commercial banks in Nigeria have been facing a of problem. These problem ranges from integrity factors location factor technological factor unstable management incompleteness of board members and unqualified personnel.

Therefore this study was aimed at looking into these problems so as to ascertain the impact on commercial banks as well as suggesting the possible ways of eliminating these problems. The researcher used three commercial banks for effective analysis namely union bank of Nigeria united bank of African and Afric bank.

In order to be arrive at a conclusion decision interviews literature review and personal observation were employed as the means of data collection. The three banks used were fund to be having almost the same basic problems even though some were bigger bank than others mismanagement politician instability and government interference in the daily affairs of banks were seen as problem to all commercial banks.

By way conclusion suggestion on how these problems can be prevented in the future were made.  One of these suggestions is by including professional who are competent in the field of banking.  Another is that government should minimize its interference in he activities of the commercial banks         



Title page

Approval page




Table of content




1.1            Statement of problems

1.2            Purpose of study

1.3            Significance of the study

1.4            Scope of the study

1.5            Limitation of study

1.6            Definition of terms

1.7            Statement of hypothesis



2.0     Review of related literature

2.1            Definition of commercial bank

2.2            Functions of Nigeria commercial bank

2.3            Ways of regulating the activities



3.0     Research design and methodology

3.1            Sources of data

3.2            Primary and secondary sources of data

3.3            Sample used

3.4            Method of investigation



4.0     Data presentation and analysis

4.1            Data presentation and analysis

4.2            Test hypothesis


5.0     Summary of finding conclusion and recommendation

5.1            Findings

5.2            Conclusion

5.3            Recommendation

5.4            Bibliography  






 The problems of commercial banks in Nigeria is the topic of this research project. Some commercial banks in Nigeria are owned by government some by individual and other by a combination of both the government and individuals.  Individuals establish banks for the purpose of making profit and to initiate business opportunity where they are available.  Organizations on he other hand establish banks for profit making and probably to and business governments establish banks merely for development purpose.

In recent time it has been the vogue for banks to be ridiculed and criticized for one reason or the other.  These criticisms have emanated both from official and unofficial quarters and now tend towards a climax.

Commercial banks in Nigeria and other countries are established to carry out the following functions it deals in money and financial service provide efficient system for making payment to settle business and personal transaction provide safekeeping for customers money and valuables provide funds for production or consumers need convention of funds into assets.

The Central Bank of Nigeria (CNB) is the apex bank. It performs the major role of monetary management through the issuance of annual monetary policy circular to banks.

So commercial banks are faced with problems because the polices from the CBN are not always carefully through out. These failures are due to the fact that the right questions, to problems of banks are matter asked nor right answers obtained. Some people attributed the problem of banks to their inability to match funds. In other words the banks refuse to marry the duration for which deposits are placed with them with the duration from which they place funds with other banks. Other argues that some of the banks reduce the portfolio of loan and advance while increasing investment.

All these allegation leveled on these banks come from the management teams of banks in Nigeria. The problems of commercial banks were formerly attributed to a regulatory body like central bank of Nigeria (CBN) in experienced personnel and inadequate capital base were also of the problem. In recent time we have a regulatory body (CBN) finance house experience in the society but still management teams and board of directors cause major problems in banking sector.

Banks face other problems such as integrity factor location factor and technological factor among other.  There also exist conflict of objective in the commercial banks. He political instability and the global economic recess affected the commercial banks negatively.



In Nigeria today the incidence of distress in the banking sector is not more surprise news to the general public. The causes and the factors responsible for the distress are numerous.  Every body tries to clip in this own ideal of the causes of the malaise in banking but there has never been a solution to the problem.  This research therefore tends to find out the factors responsible for the problem in Nigeria commercial bank. This paper is aimed at identifying the problems associated with commercial banks using united banks for Africa (UBA) and African bank. The paper will find out how he board of director with the management team brings problem to banks as well a he effect of integrity location and technological factors and government interference on bank.

This paper promises an overhaul of the commercial banking system, which involves default forgeries frauds and destruct.


This work aims at investigating the problems which commercial banks in Nigeria face with a view to ascertaining how for the commercial banks have been fanny as regards these problems and to recommended appropriate remedies that would minimize the problems.  It is also an attempt to suggest ways in which these problems can be avoided in the futures taking into consideration the adage that say “prevention is better than cure”

In other word the researcher intends to examine the roles performed by the commercial banks and to carry the necessary evaluation.



This work will be of immeasurable worth to the banks, as it will show how far they have been coping a part from suggesting solution to these problems facing them.

It will be useful to individuals and government who may wish to go into banking business in knowing and taking connective measure in commercial banks business.

Finally this research work will serve as an addition to the existing literature in the area of banking finance and policy programme to enhance economic development of the country and the world large.  Besides it will serve as reference for future researchers on the field.



The research is meant to address the following research question.

1.                 Do the incompetence of the board of director and the management team bring problem to the bank?

2.                 Do the political instability and the global economic recess affect the commercial bank?

3.                 Do flouting of he ethic of profession affects the commercial banks?

4.                 Integrity location factor and technological factor affect the commercial bank?

There are the questions affects by the research



Null (H0) and alternative (H1) Hypothesis   

A null hypothesis is one which state that there is no difference between two situation that are being compared and can therefore be disapproved by an alternative observation which is the best way of setting up a hypothesis the alternative hypothesis with be accepted.

The following assumptions are made which have to be proved in the course of the study.

H0:         There are no problems facing commercial banks in Nigeria.

H1:         There are problems facing commercial banks in Nigeria.



The united bank for African and African bank of Nigeria they are the banks this research is carried out.

This work faced some problems of getting the appropriate officers of the banks visited.  Most managers were not on seat or were busy to attend to customers and had very litter time to talk a researcher.

The research was also limited by the unwilling of managers or officers to disclose important information do the project.

Finance was not to be left out this type of study requires adequate money and time to enable the researcher obtain necessary data.  In view of the current economic difficulties in the country this problem was thus evident in view of all these problems the researcher aim of study was achieved.



a.  Valuable:    Worth a lot of money.

b.  Monetization:       To give cash obtained or being give out in an economy.

c.  Liquidation:          Act winding up a bank because of the

d.  Distress:     The state of being in danger or difficulty and needing help.

e.  Portfolio:    A set of investments owned by person bank

f.   Fraud:         Criminal deception

g.  Central bank:       Is usually a government owned bank, which help to control and supervisor the entire monetary and financial system of a country.

Deposit:           Money in custody of bank the amount paid by customer on first instatement.

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The Problem Facing Commercial Banks In Nigeria