UTILISATION AND INTEGRATION OF OPERATIONS RESEARCH TECHNIQUES IN NIGERIAN COMMERCIAL BANKING INSTITUTIONS

ABSTRACT

The  study seeks  to  determine  the  extent  of utilisation and  integration of Operations Research (OR) in Nigerian commercial banking institutions. Its specific objectives are to ascertain the frequency of use of OR techniques in the investment decisions of Nigerian commercial banks, ascertain the extent of use of OR model in the liquidity management decisions of Nigerian commercial banks, determine the ratio of usage of OR techniques in the loans and credit administration decisions of Nigerian commercial banks, determine the level of application of OR in the operations management decisions of Nigerian commercial banks,  ascertain  the  determinants  of  successful  OR  application  in  the  operations  of Nigerian commercial banks; and to  determine the  level of integration of   OR in the commercial banking operations of Nigerian commercial banks. The research instrument used for data collection is a combination of questionnaire and structured oral interview. The data collected was analysed using simple percentages and relative frequencies; while the hypotheses raised were tested using Z-test statistics at  five percent (5%) level of significance. The investigations revealed a high frequency of use of OR techniques in solving the investment decision problems of Nigerian commercial banks, a high extent of use of OR techniques in handling the liquidity management decision problems of Nigerian commercial banks, a high ratio of usage of OR techniques in solving the loans and credit administration  decision  problems  of  Nigerian  commercial  banks,  a  high  level  of application of OR techniques in solving the operations management decision problems of Nigerian commercial banks and  a  high  level of  integration of OR  techniques in  the operations of Nigerian commercial banks. The study also revealed that the determinants of successful OR application in Nigerian commercial banks include employee level of awareness, education, top management support, nature of the business environment and the intended  benefits.  The  oral interview revealed  that  the  extent  of use  of OR  impacts positively on corporate financial performance of Nigerian commercial banks; and that the most critical challenge facing OR usage is the commonly talked about “human factor” in decision making and implementation. The study however recommends the enhanced usage of OR in Nigerian commercial banks and other related commercial banking institutions, the establishment of OR departments in the nations citadel of higher education as well as the strengthening of the newly established Institute for Operations Research of Nigeria, to further enhance OR awareness and usage in Nigerian commercial banks. To the best knowledge of the researcher, a unique contribution of the study is that no research work of this  nature  has  been  specifically  conducted on  the  utilisation and  integration of OR techniques in Nigerian commercial banking institutions.

CHAPTER ONE INTRODUCTION

1.1      PREAMBLE OF THE STUDY

In recent years, there has been considerable interest in describing the practice of Operations Research in  business  oriented organisations (commercial banks  inclusive). Previous studies have, for the most part, been general in their description of the role of Operations Research in business organisations (Uwah, 2007; Ighomereho, 2006). All business organisations are set up to achieve certain specified goals and objectives by efficiently utilizing the vast array of resources which they have at their disposal. These resources often include human resources, machines and money amongst numerous others; and often decisions must be made concerning the most efficient and cost effective means of  utilizing  every  available  resource.  One  of  the  modern  techniques  that  can  assist managers in this regard is Operations Research which is also referred to as Management Science, Quantitative Analysis or Decision Science. Operations Research basically refers to the application of quantitative techniques in organisations with the aim of aiding and improving management decision making (Kalavathy, 2008). It is also concerned with the analysis of complex business problems with the aim of determining the optimal solutions to   such  problems.  In  this  regard,   it   emphasizes  throughout  the  optimization  of organizational and system performance using quantitative techniques and modeling to help make better decisions (Ighomereho, 2006).

Operations Research can be said to have been in existence since the beginning of mankind (Agbadudu, 2006). However, many scholars, among whom are Wagner (2010) and Taha (2010) agree that Operations Research as a new discipline crystallized during the

heat of the Second World War, when a team of scientists was called upon by the military authorities in England to develop ways to make the most effective use of limited military resources (Wisniewski, 2009; Anderson, 2010). Their mission was to formulate specific proposals and plans for aiding the military high command to arrive at decisions on optimal utilization of scarce military resources and also to implement the decisions arrived at effectively. The team of experts was basically constituted from various diverse fields of human endeavour to under study the tactical and strategic problems associated with land and air defence of Great Britain. Under their given terms of reference, the team also studied the different ways to utilize the newly invented radar and also of the effectiveness of the newly developed types of military jet bombers. The establishment of this scientific inter-disciplinary team thus marked the first formal Operations Research activity. The name Operations Research originated because the team researched on military operations (Uwah, 2007; Ighomereho, 2006).

Due  to  the  successful  utilization  of  Operations  Research  (OR)  techniques  by military authorities in Britain and much later in the United States of America (USA), managers of diverse organizations became interested in using the techniques of Operations Research to solve organizational problems. Hence, in the early 1950s, business organizations began to absorb some members of the Operations Research team that was constituted by the military high command. Today, OR is a dominant and indispensable decision-making tool widely used by business organizations in Britain, United States of America, Japan, Canada, France, West Germany, China, India, South Korea and Nigeria (Ekoko, 1999).

This  naturally  led  to  an  increase  in  the  number  of universities offering  both

undergraduate and post graduate degree programmes in Operations Research (Anderson,

2010); and the formation of professional OR bodies such as the Operational Research Society of America (ORSA), American Institute of Decision Sciences (AIDS), European Operational Research Society (EORS), the Institute of Management Sciences (TIMS) now known as Institute for Operations Research and Management Sciences (INFORMS) and the  International  Federation of Operational Research Societies  (IFORS); which  is  an organization made up of national Operations Research societies all over the world. However, in Nigeria, the only professional body of Operations Research was formed in

2006 and is also yet to be fully recognized nationally and internationally.  These features could indicate that Nigerian organizations still do not widely utilize Operations Research in their business operations (Ighomereho, 2006).

Although, OR techniques have long been used in many diverse areas of economic analysis and business administration, their applications in commercial banks and other related financial institutions in Nigeria have been very low compared to other business organisations that are actively engaged in the production of tangible goods (Agbadudu,

2006; Uwah, 2007). The inherent uncertainty of their cashflows, cost of funds and return on investments have prompted Nigerian commercial banks to seek out greater efficiency in the management of their assets and liabilities. This need has led to studies concerned with how to structure a commercial bank’s assets and liabilities to make optimal trade-offs among risk, return and liquidity (Ighomereho, 2006). These studies focus on determining how funds should be used in various economic scenarios (Abosede, 2008; Nnanna, 2005; Unegbu, 2006). Important factors in these decisions include: balancing of anticipated sources  and  uses  of  funds  to  meet  liquidity  and  capital  adequacy  constraints  while

concurrently maximizing profitability and allocating funds among assets based on risk and liquidity classification, maturity and rate of return and the adjustment of a bank’s financial structure in terms of liquidity, capital adequacy and leverage (Uwah, 2007; Ighomereho,

2006; Okigbo, 1981).

In   recent   years,   the   Nigerian  commercial   banking   system  has   undergone remarkable changes in terms of the number of institutions, ownership structure as well as depth and breadth of operations. These changes resulted from the challenges posed by deregulation of the financial sector, globalization of operations, technological innovations and adoption of supervisory and prudential requirements that conform to international standards. As at June 2004, there were eighty nine (89) deposit money commercial banks operating in the country, comprising institutions of various sizes and degrees of soundness. The sector then exhibited preponderance of a few commercial banks; as the ten largest commercial banks accounted for about fifty percent (50%) of the industry’s total assets and liabilities. The small size of most commercial banks made the average cost of operating in the industry very high. The high average cost was amongst many other factors, generated by individual expensive headquarters, separate investment in software and hardware and heavy fixed cost and operating expenses resulting significantly from low levels of application of quantitative Operations Research and management techniques (Abosede,

2008).

This commercial banking situation,  however, had  implications  for  the  cost  of intermediation, the spread between deposit and lending rates and also generated undue pressure on commercial banks to evolve survival strategies. Many commercial banks also shifted  from  carrying  out  strict  commercial  banking  business  in  terms  of  savings

intermediation to fee based activities in foreign exchange, government treasury bills and sometimes in direct importation of goods through phony companies. Also the small size of the commercial banks and other crisis they faced made depositors to dwindle as most of them in apprehension preferred to have their funds outside the official commercial banking system for safety purposes. Even the adoption of the twenty five billion naira (N25 billion) minimum capital base for commercial banks which reduced the number of commercial banks to 25 in 2005, did not help matters; as the commercial banking system began to experience the distress syndrome of the 1980’s due largely to insider abuses, lack of good corporate governance, and inefficient utilisation of human and material resources available to commercial banks (Omachonu, 2009).

The subject matter of Operations Research has three separate but not distinct areas, namely: theoretical, computational and applied. Thus Nigerian commercial banking institutions  will  likely  perform  better  if  they  continuously  increase  their  ability  to recognize some potential OR problems, formulate such problems using any of the applicable OR models and employ the proper computational techniques to solve mathematical  aspects  that  tie  together the  elements  of the  model.  The  focus  on  the theoretical aspects of OR models is of vital importance as it serves as the foundation for the many computation techniques that are employed in solving OR models (Ikpotokin,

1999).

To be able to successfully apply OR techniques to practical real life commercial banking problems, one needs special skills and capabilities that can only grow with time and experience. When these skills are fully developed in us, it becomes easier to apply the OR  techniques to  problems  relevant  to  the  bank’s  environment  and  well-being.  The

classroom acquisition of knowledge is of no much use to our immediate environment and society if it is not being applied to solve existing problems that in many ways imaginable inhibits our much desired march to economic and technological breakthrough. In this regards, Operations Research (OR) techniques and its practical applications is vital in our present  national  and  economic  situation,  if  the  theoretical computational and  applied aspects can be properly linked together (Ekoko, 1997).

1.2      STATEMENT OF THE PROBLEM

There is a difficulty in ascertaining the level of integration and utilisation of OR in the core commercial banking functions of Nigerian commercial banks. Previous researches have tended to focus more on the application of OR in manufacturing organisations that are involved in the production of tangible goods, while very low emphasis has been placed on conducting research related to  OR usage in commercial banking institutions; with specific emphasis on the four core commercial banking decisions. Many stakeholders who are interested in ascertaining the impact of OR on the core commercial banking decisions of commercial banks have had to resort to position papers and opinions of some practitioners and researchers in the field; without any form of statistical test of significance to add validity to their opinions, findings and suggestions. These core commercial banking decisions are very vital for efficiency and profitability as they significantly impact on firm value and shareholders wealth. The core commercial banking decisions include investment decision, liquidity management decision, loans and  credit  administration decision and operations management decision.

In addition, analysis outlining the potential impact of OR on costs, savings, revenue growth and increased customer convenience in commercial banking halls is increasingly

generating considerable interest from stakeholders (practitioners, regulatory authorities and researchers) in the commercial banking sector worldwide; as problems in these area have often led to major incidence of bank fraud, distress and involuntary liquidation of major commercial banks. Some challenges that specifically fall within the purview of these core commercial banking decisions includes challenges related to cash inventory management, determination of optimal cash reserve, liability management, interest rate management, asset  management, and optimal timing of deposit withdrawals in commercial banking halls. This line of research is however still very limited and very much at the infancy stage in Nigeria at the moment.

Furthermore, in recent years, commercial banking institutions in Nigeria have had their own fair  share of commercial banking challenges (like their counterpart abroad) which still pose a great threat to their corporate existence and profitability. Such challenges emanate from the quality of their investment decisions, liquidity management decisions, loans and credit administration decisions and operations management decisions. Wrong decisions in these areas in Nigerian commercial banks have continued to constitute a major cause of bank distress, bank fraud, low level of profitability and low level of customer service delivery. Also, many Nigerian commercial banks are saddled with long and uncontrollable queues because neither the arrival times (or arrival rate) of customers or the service times (or service rate) of the facilities are predicted accurately. These have led to the existence of many idle facilities in Nigerian commercial banks, despite the significant sum of money invested in procuring and installing them.

Due to the sensitive nature of commercial banking operations, there exists a paucity of data that could be used by researchers concerned with studies aimed at  improving

efficiency (through OR application)  in Nigerian commercial banking  institutions.  For instance, data on the specific challenges faced by commercial banks in the preparation of periodic plans, process selection, capacity planning, and facility layout are often scarce or treated as classified documents in Nigerian commercial banks. Yet such data if widely available could easily facilitate research studies which can help prevent stunted growth, inefficiency or possible financial distress in Nigerian commercial banks. In cognisance of the potential problems that could arise as a result of low OR usage in Nigerian commercial banks; it became expedient and even compelling to conduct a study on the utilization and integration of Operations Research (OR)  techniques  in  Nigerian commercial  banking institutions; the core commercial banking functions where they have been successfully applied and if their application have had any significant effect on their commercial banking operations.

1.3      OBJECTIVES OF THE STUDY

The aim of the study is to ascertain the extent of utilisation and integration of Operations Research techniques in Nigerian commercial banking institutions. In specific terms, the research objectives are:

1.  To ascertain the frequency of use of OR techniques in the investment decisions of

Nigerian commercial banks.

2.  To ascertain the extent of use of OR models in the liquidity management decisions of Nigerian commercial banks.

3.  To  determine  the  ratio  of  usage  of  OR  techniques  in  the  loans  and  credit administration decisions of Nigerian commercial banks.

4.  To  determine  the  level  of  application  of  OR  in  the  operations  management

decisions of Nigerian commercial banks

5.  To ascertain the determinants of successful OR application in the operations of

Nigerian commercial banks.

6.  To determine the level of integration of OR in the commercial banking operations of Nigerian commercial banks.

1.4      RESEARCH QUESTIONS

In order to actualize the desired objectives of this research some basic research questions which reflect on the objectives of the study are fielded. The questions in specific terms include:

1.  What is the frequency of usage of OR techniques in the investment decisions of

Nigerian commercial banks?

2.  What is the extent of use of OR models in the liquidity management decisions of

Nigerian commercial banks?

3.  What is the ratio of usage of OR techniques in the loans and credit administration decisions of Nigerian commercial banks?

4.  What is the level of application of OR in the operations management decisions of

Nigerian commercial banks?

5.  What are the determinants of successful OR application in Nigerian commercial banks?

6.  What is the level of integration of OR in the operations of Nigerian commercial banks?

1.5      RESEARCH HYPOTHESES

Modern researchers agree that research whenever feasible should proceed from hypotheses (Agbonifoh and Yomere, 2009). Hypotheses serves as a powerful beacon that light the path for research work. Therefore using hypothesis as a framework for this study becomes necessary. In this study, the following hypotheses, stated in the alternative form, will serve as  aids  jointly  in  finding answers to  the  research questions raised and  in fulfilling the objectives of the study.

HA1:    There is a high frequency of usage of OR techniques in the investment decisions of

Nigerian commercial banks.

HA2:    There  is  a  high extent  of use  of OR techniques in  the  liquidity  management decisions of Nigerian commercial banks.

HA3:    There  is  a  high  ratio  of  usage  of  OR  techniques  in  the  loans  and  credit administration decisions of Nigerian commercial banks.

HA4:    There is a high level of application of OR techniques in the operations management decisions of Nigerian commercial banks.

HA5:    Successful application of OR models in Nigerian commercial banks is a function of commercial banks employee level of awareness, education/technical knowhow, top management support, nature of business environment and intended benefits.

HA6:    There is a high level of integration of OR in the operations of Nigerian commercial banks.

1.6      SIGNIFICANCE OF THE STUDY

There are  several compelling  needs  for  undertaking this  study.  It  will update existing body of knowledge by going a step forward to evaluate the awareness, application and effect of Operations Research models in the management of Nigerian commercial banking institutions. It is therefore expected that the findings of this study will be of immense benefit to policy makers in Nigerian commercial banks, relevant government institutions, researchers and numerous other stakeholders. As was mentioned earlier, very few empirical studies have been conducted in Nigeria to find out the extent to which Nigerian commercial banks have integrated and used OR in solving numerous commercial banking problems.

To the policy makers, the study will point out the next direction which commercial banking reforms should focus upon in other to position and direct Nigerian commercial banks towards the right path of effectiveness and efficiency especially in the area of resource utilization.

The relevant government institutions will find the study beneficial in the sense that it  will  enhance their  understanding of Operations Research methods as  an analytical management  tool that  can  turn  around the  fortunes  of Nigerian commercial banking institutions. The study will therefore aid in revealing what has been done in Nigerian commercial banks and what needs to be done to enable them perform effectively in the local and international world economy. The study will also aid them in the development and employment of appropriate policies and strategies that take into consideration the risk peculiar to the commercial banking sector. It is expected that this will to an appreciable extent address the issue of incessant distress both systemic and non-systemic, such that the

nation can have a dependable financial system that will effectively serve its purpose of financial intermediation and economic development.

Other relevant stakeholders like shareholders, members of the Boards of Directors who formulate policies, managers and junior staff who implement the policies formulated by top management, fund providers (who would want their monies paid to them when their bills  falls  due);  and  customers of commercial  banks  who  want  efficient  commercial banking services rendered to them will find a study on the utilisation and integration of OR techniques in Nigerian commercial banks very beneficial. Besides, the findings of this study will lay foundation for other academia and research students to carry-out further research related to this study. The findings of this study, may also serve as very useful springboard for related studies in Nigeria and some other less developed countries (LDCs) or added experience for some others.

1.7      SCOPE OF THE STUDY

The scope of a study can be defined geographically, temporally (in terms of the subject matter) and the population (Agbonifoh and Yomere, 2009). Geographically, our scope is limited to the Nigerian commercial banking institutions operating in the South- West Geopolitical Region of Nigeria. Temporarily, there is no time frame as our study adopts the cross-sectional survey which involves studying the current state of a unit or group (in this case, commercial banking institutions in South-West Geopolitical Zone of Nigeria) at a particular point in time.

The study focuses on OR application in the investment decisions, liquidity management decisions, loans and credit administration decisions and operations management  decisions  of  Nigerian  commercial  banking   institutions.  The  selected

commercial banks from which the respondents were drawn include First Bank of Nigeria PLC, Union Bank of Nigeria PLC, ECO Bank of Nigeria PLC and Zenith International Bank PLC.

1.8      LIMITATIONS OF THE STUDY

In general, the depth and thoroughness of this research was greatly constrained by the following factors which were beyond the control of the researcher. The first limitation is that of insufficient time on the part of the researcher which made in-depth analysis of the study almost impossible. There was also the problem of inadequate financial resources (money).This curtailed the extensive survey of all the commercial banks in the country that are operational. Hence, the study was limited to only four sampled commercial banks and the study also concentrated on the Southwestern geo political zone of Nigeria. Thus it was impossible to study other commercial banks outside the selected sample and region.

Furthermore, attitude of the respondents was another limiting factor because of the tight schedule and busy nature of bank workers. This led to a low level of response initially to the administered questionnaire. The researcher had to make repeated visits to the banks in order to retrieve the completed questionnaire.

1.9      DEFINITION(S) OF TERMS

Operation Research: This is defined as a problem solving science-based activity using analysis and modeling as a basis for aiding decisions makers in organisations to improve the performance of the operations under their control.

Investment Decision: This is defined as the allocation of capital funds to investment proposals to yield future benefits that will meet up with the expectations of a firm’s numerous clients and investors.

Liquidity Management Decision: This deals with the management of a firm’s current assets and working capital; as well as the ease at which they can be readily converted into cash.

Loans and Credit Administration Decision: This involves the allocation (or extension) of funds to deficit segments or units of the society. It could also be defined as the provision by a creditor, such items like goods, services or money to another party or legal entity with the repayment coming at a later date.

Operations Management Decision: This focuses on carefully managing the processes utilized  in  the  production  of  goods  and  services.  It  also  include  the  substantial measurement and analysis of all the internal processes of a firm.

Linear Programming: This is defined as a technique for specifying how to use limited resources or capacities of a business to obtain a particular objective such as least cost, highest margin, or least time, when these resources have alternative uses.

Simulation Modeling: This involves the construction of a replica or model of the problem on which we can experiment and test alternative course of action.

Queuing Models: Queuing models deals with problems involving customers who wait on a line to receive service. Queuing, or waiting line problem arises whenever the demand for customer service cannot perfectly be matched by a set of well defined service facilities. Decision  Theory  Models:  This  basically  involves  the  use  of  a  rational  process  for selecting the best of several alternatives.

Forecasting Models: This involves the prediction of future events and outcomes in the business environment long before they occur.

Network Models: This refers to techniques that are designed to assist in the planning scheduling and  control of projects; the  objective being  to  provide a  quantitative and analytic means for scheduling project activities.

Goal Programming Models: This is basically a special type of linear programming model that can be used to analyse decision situations involving single or multiple goals; which sometimes are complementary and in most cases are conflicting.

Dynamic Programming Models: This is defined as a method used for solving decision problems such that the programmes are broken down into a sequence of smaller decision problems after which the optimum solution is derived.

Markovian  Models:  These  are  models  which  involves  a  sequence  of  events  or experiments in which the probability of occurrence for each event  depends upon the immediately preceding event.

1.10    PROFILES OF THE SELECTED COMMERCIAL BANKS UNDER STUDY

1.10.1 First Bank of Nigeria PLC

First Bank of Nigeria Plc for over a century has distinguished itself as a leading financial   institution  and   a   major   contributor  to   the   economic  advancement   and development of Nigeria. The Bank was incorporated as a limited liability company on March 31, 1894, with Head Office in Liverpool by Sir Alfred Jones, a shipping magnate. It started  business  in  the  office  of  Elder  Dempster  and  Company  in  Lagos  under  the corporate name of the Bank for British West Africa (BBWA) with a paidup capital of

12,000 pounds sterling, after absorbing its predecessor, the African Commercial banking

Corporation, which was established earlier in 1892. In its early years of operations, the

Bank recorded an impressive growth and worked closely with the Colonial Government in performing the traditional functions of a Central Bank, such as issue of specie money in the West African sub-region.

To justify its West African coverage, a branch was opened in Accra, Ghana in 1896 and another in Freetown, Sierra Leone in 1898. These marked the genesis of the Bank’s international commercial banking operations. The second branch of the Bank in Nigeria was in the old Calabar in 1900 and two years later, services were extended to Northern Nigeria.

To reposition and take advantage of opportunities in the changing environment, the Bank had at various times embarked on restructuring initiatives. In 1957, it changed its name from Bank of British West Africa to Bank of West Africa. In 1969, the Bank was incorporated locally as the Standard Bank of Nigeria Limited in line with the Companies Decree of 1968. Changes in the name of the Bank also occurred in 1979 and 1991, to First Bank of Nigeria Limited and First Bank of Nigeria Plc, respectively. In 1985, the Bank introduced a decentralised structure with five regional administrations.

To further enhance the Bank’s operational efficiency, the bank was reconfigured into sixteen Area Offices in 2003. In view of the foregoing, it was therefore, a natural progression when in 2001; the  Bank began the  process of transforming its corporate identity to reflect its rejuvenated focus. The transformation process which began in earnest in 2001 gained momentum in 2003 and was launched on Tuesday, April 27, 2004 with the introduction of a new corporate identity.

First Bank got listed on the Nigerian Stock Exchange (NSE) in March 1971 and has won the NSE President’s Merit Award eleven times for the best financial report in the

commercial banking sector. In line with the Bank’s mission statement “remain true to our name  by  providing  the  best  f6inancial  services  possible”  and  its  brand  essence, “dependably dynamic”, the Bank will consistently transform itself as it forges ahead in its second century of qualitative commercial banking to the nation. The company has a total of 6,748 employees and 360 branches in Nigeria (First Bank of Nigeria Plc, 2009).

1.10.2 Union Bank of Nigeria Plc

Union Bank of Nigeria Plc was established in 1917 as a Colonial Bank with its first branch in Lagos. In 1925, Barclays Bank acquired the Colonial Bank, which resulted in the change  of  the  Bank’s  name  to  Barclays  Bank  (Dominion,  Colonial  and  Overseas). Following the enactment of the Companies Act 1968 and the legal requirement for all foreign subsidiaries to  be  incorporated locally,  Barclays Bank (D C O)  in 1969 was incorporated as Barclays Bank of Nigeria Limited. The ownership structure of Barclays Bank remained un-changed until 1971 when 8.33% of the Bank’s shares were offered to Nigerians. In the same year, the Bank was listed on the Nigerian Stock Exchange. As a result  of the Nigeria Enterprises Promotion Act of 1972, the Federal Government of Nigeria acquired 51.67% of the Bank’s shares, which left Barclays Bank Plc, London with only 40%. By the enactment of the 1972 and 1977 Nigeria Enterprises Promotion Acts, Barclays Bank International disposed its shareholding to Nigerians in 1979. To reflect the new ownership structure and in compliance with the Companies and Allied Matters Act of

1990, it assumed the name Union Bank of Nigeria Plc (Union Bank of Nigeria Plc, 2009).

In line with the Central Bank of Nigeria’s commercial banking sector consolidation policy, Union Bank of Nigeria Plc acquired the former Universal Trust Bank Plc and Broad Bank Ltd and absorbed its erstwhile subsidiary Union Merchant Bank Ltd. The

Bank also increased its shareholders’ funds through a Public Offer/Rights Issue in the last quarter of 2005. With these developments, Union Bank remains one of the most capitalized commercial banks in Nigeria. It has a shareholders’ funds of N102.542billion and operates through 386 network of branches that are well spread across the country, all of which are on-line, real time. The company has a total of 8, 027 employees and 386 branches in Nigeria (Union Bank of Nigeria Plc, 2009).

1.10.3 ECO Bank of Nigeria PLC

Ecobank Nigeria PLC was incorporated on October 7th, 1986 under a private sector initiative spearheaded by the Federation of West African Chambers of commerce and Industry with the support of ECOWAS (Ecobank Nigeria PLC, 2009). *The bank commenced business on April 24th, 1989 at Plot 21, Ahmadu Bello Way, Victoria Island, Lagos Nigeria. It was listed on the Nigerian Stock Exchange on June 25th 2006. Ecobank PLC, therefore is a twenty six year old commercial bank with business offices located in several parts of Nigeria and Africa (Ecobank PLC, 2009).

The bank is one of the largest in Nigeria. Her financial year runs from September

30th  to October 1st  of the subsequent year. Ecobank’s impressive performance over the years accounts for the quality of its customer portfolio which includes Corporate Organisations,   High   Net-Worth   Individuals,   the   Federal   Government,   and   State Government of numerous African countries. The company has a total of 3,743 employees and over 420 branches in Nigeria (Ecobank PLC, 2009).

1.10.4 Zenith Bank of Nigeria PLC

Zenith Bank Plc is presently the most capitalized company on the Nigerian Stock

Exchange (NSE), with a market capitalization of N612.82 billion as at end – June 2007 and

the biggest bank in Nigeria in terms of total assets plus contingents which stood at N1,

178.39 billion as at June 2007 (Zenith Bank of Nigeria Plc, 2009).

The bank was established in May 1990 and started operations in July same year as a commercial bank. It became a public limited company on June 17, 2004 and was listed on the Nigerian Stock Exchange on October 21, 2004 following a highly successful initial public offering (IPO), which recorded a subscription level of 554%. The bank presently has a shareholder base of above one million, an indication of the wide acceptability of the Zenith brand (Zenith Bank of Nigeria Plc, 2009).

Its head office is located at 87, Ajose Adeogun Street, Victoria Island, Lagos, Nigeria. With over two hundred and fifty (250) branches and business offices nationwide connected online, real time, Zenith Bank has presence in all the state capitals, the Federal Capital Territory (FCT) and numerous towns and cities (Zenith Bank of Nigeria Plc, 2009).

With about three hundred (300) business offices, connected online-real time, the Zenith franchise covers all the state capitals, the Federal Capital Territory (FCT), and major towns and cities in Nigeria. The Bank’s wide area network facility is efficiently deployed and seamlessly integrated through a related communication company (Zenith Bank of Nigeria Plc, 2009).

The Bank’s business location strategy and  infrastructure deployment reflect  its commitment to customer enthusiasm at all times in all business offices nationwide. The same unique brand of financial services awaits customers in each location. The company has a total of 3,911 employees and 250 branches in Nigeria (Zenith Bank of Nigeria Plc, 2009).

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