Thesis Chapters by oluwafemi Adesanoye
IMC, 2018
The Nigerian Banking Industry has come a long way and undergone various changes within the past d... more The Nigerian Banking Industry has come a long way and undergone various changes within the past decades. The formal introduction of modern banking in Nigeria took place in 1892 (Oluduro, 2015). This was the date the precursor of First Bank of Nigeria, the African Banking Corporation, opened its first branch in Lagos. However, the bank experienced some difficulties and eventually decided to transfer its interest to another company in 1893. This led to the formation of a new bank known as the British Bank for West Africa (B.B.W.A) in 1894 (Ailemen, 2012; Chude and Chude,2015). The British Bank for West Africa later metamorphosed into today’s First Bank of Nigeria Plc. Nigeria had twelve commercial banks with 160 branches at independence. The independence era till 1987 brought no serious competition as government control gave maximum power to the then four largest banks (First Bank, United Bank for Africa, Union Bank and International Bank for West Africa). The changes that occurred in the banking industry can be attributed to the deregulation and liberalization policies which opened the industry to various competitors and led to economic development. This resulted in the entrance of many new banks and the proliferation of existing ones. For instance, from 45 banks in 1986, there were 122 (67 commercial and 55 merchant) banks in 1992 together with mortgage institutions, urban development banks, non-bank financial institutions and specialized banks such as Peoples Bank. The attendant aggression and competition that characterized this era grew when finance houses, mortgage banks and community banks rose in the 1980s and early 1990s with intense competition for customers’ deposits. However, the financial distress that started in 1994 with the insolvency of more than 29 banks, the interest rate deregulation of 1997, the introduction of the Universal Banking and the recapitalization drive that came with the return to democratic rule all raised the stakes of competition in the industry (Abubakar, 2014).
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Thesis Chapters by oluwafemi Adesanoye