CHAPTER ONE
INTRODUCTION
1.1
BACKGROUND
OF THE STUDY
Standard
trust bank PLC commercial operations in August 1997 as a commercial bank with
five business offices driven by a board of directors, a management team and
staff focused on revolutionizing the Nigerian banking industry. Following the resolution of the board of
directors at an extra-ordinary general meeting on 19th July 2002, the bank because a
public limited company (PLC). From the
humble beginning, they have been able to record modest achievements, which
makes the today one of the leading banks in Nigeria.
Standard
trust bank remains one of the most stable and consistently growing backs in the
country. Efficient assets actualization
and management resulted in the growth of balance sheet size from #984 million
in 1997 to #21,343 billion in 1999 and #69,945 billion by the and of 2001/2002
financial year. The bank has a full
range of banking services and products provided to delight their customer. They include personal/corporate saving
account, standard care account, personal/corporate current account. Domiciliary account standard flexi-fixed
account and so on.
In
any business outfit, be it government or privately owned, the moment of
decision taking present challenges to the executives.
Decision
taking is a life wire of any organization as the future growth of the
enterprise depends largely on the soundness and unsoundness of such
decisions. For the banking sector in
particular, the importance of valid decision in enhancing it’s growth and
profitability cannot be over stretched.
The banking industry in Nigeria
is in a state of chaos.
Most
of the banks are classified as distressed, some of them have been liquidated
while some are ordered to recapitalize or face liquidation. The dangerous trend in the banking industry
has sent a disturbing have to the national economy. In a rapid reaction to salvage the banking
industry and save the economy from collapes the government enacted the failed
and established a tribunal to try the former decision makers and takers in the
banks who have contribute to the banks failure.
The
utilization of management information on banks landing decisions will make a
lot of impact in enhancing, banking growth and productivity. The usefulness of management information
cannot be restricted to the landly decision as it is very useful in all
operations in the banks.
Osisoma
(1990) classified management information into three parts which include
store-keeping information, attention directing information and problem solving
information. Management information
contain such details as regard banks financial standing and long term.
Viability, some of the ways banks lend
money are through banks overdraft and other advances it can make to various
categorize of its customers. Before banks
land money they are interested in the ability of their customers to pay
interested in the ability of their customers to pay interest on borrowed loan
as well as their ability to refund the loan at the appropriate time.
Management
information is indispensable in granting such loan, overdraft and other
advances also in monitoring the realized of the disbursed funds. Before the decision are reached management
information should be sought for to provide the choices as well as the outcome
of the possible decision. Having
critically estimated the cost of each alternative and bearing in mind that the
major aim of banks is maximizing profit, the management of the bank use the
data and basis, provided in management information of in taking useful decision
that is in line with the goals of the organization.
Management
information represent the real life situation of the banks, which can not be
ignored in lending. It is very useful in
planning, co-ordinating and control, moreover, with management information every
lending decision will be based on data that have first of all to be selected,
verified and subsequently utilized for growth, profitability and viability of
the bank.
1.2 STATEMENT OF PROBLEM
Recent
development in the banking industry in Nigeria have shown that most of the
bank management and decision takers have glossly violate in their
operation. Most affected in the
violation is the banking regulation the misuse, abuse and total neglect of
management information in bank lending decision.
Because
of the importance of management information in enhancing banks growth and
development, we have decided to investigate it’s impacts in bank lending
decisions especially in this era when so many banks are distressed and
liquidated. The problems rocking the banking
sector in Nigeria
cannot go unaccounted for by the accountants who are first and foremost
concerned for the accountants who are first and foremost concerned with
accountability and probity in financial industry, business entities and
government department. As student of
Banking and finance is useful in bank lending decision. The bank is stable and healthy and we want 40
know whether management information contributes to the financial standing of
this bank.
The
problems in the banking sector has not only contributed to the crippling of the
nations economy but has also negatively affected their hard earned money in the
bank only to be told that bank have no money to pay them. This unfortunate develop cannot continue
indefinitely.
We
are required to tackle the problem, in this regard, it is pertinent to
understand the impact of management information in causing eradicating and
addressing the problem facing banks.
Do
knowledge of banks not earnings, working assets, customers account in the banks
financial study have implication in it’s landing decision? Is management information necessary for the
future investment growth and development
of the bank? Answer to these questions
posed above constitutes the lore problem of this study.
1.3 OBJECTIVES OF THE STUDY
This
study intends to achieve the following objectives
1.
To
position the bank for the higher goals it has set for itself through management
information.
2.
To
improve the way of operation in the banks
3.
To
change the perception of banks for the better
4.
To
real firm the core values of the banks
5.
To
ascertain the type of management information made available to bank management.
6.
To
examine the extent to which bank management utilize management information in
lending decision.
7.
To
determine whether incidence of bad debts can be avoided if bank management
utilize management information in their lending decision.
8.
To
suggest ways which usage of management information can be made more affective
in bank lending system.
9.
To
make recommendation and ways of strengthening the position contribution of the
banking sector to the national economy.
1.4 SIGNIFICANCE OF THE STUDY
This
study is significant in the sense that it will look at the impact of management
information on bank lending decision at standard trust bank PLC which has
branches all over the Federation.
It
is hoped that through this study, some good contribution would be made to the
existing stock of knowledge in this field.
This
study will also act as a guide to decision makers in restructuring the lending
policy of their bank.
1.5 LIMITATION OF THE STUDY
The
writer will collect data thoroughly examine and gather information with
reference to standard trust bank PLC to know the extent of their bank lending
decision.
It
is not easy carring out a research of this magnitude. In this study we may be handicapped in
certain area. The research is student
who will be combining the work with other rigorous academic activities in the
campus.
As
a result, the limited available time will be shared between this study to a
certain decree.
Another limiting factor is fund. The
researcher is handicapped financially. He is a student who depended solemnly on
meager financial assistance to survive on campus .The huge financial
requirement of a study of the type may not fort coming. Further more, due to sensitive and probing
nature of this study all the necessary co-operation from the bank official may
not be as are may have expected. The problem may even be compounded by the
atmosphere of secrecy and security which guide the banking operations.The
limitation not with standing the researcher will employ all necessary
methodologies and give up more of their times and funds to accomplish the work
to the required standard.
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