THE IMPACT OF RECAPITALIZATION ON SHAREHOLDERS RETURN IN NIGERIAN BANKING INDUSTRY
ABSTRACT OF THE STUDY
This research work focuses on the Effect of Information Communication Technology (ICT) on deposit mobilization and the profitability of banks in Nigeria. It also revealed how computer technology is being used in taking strategic decisions in an organization, with the usage of computer technology. It helps to discover how efficiently and effectively the bank(s) are performing as regards deposit mobilization and trend(s) in profitability. Some research instrument(s) were used in this continuous writing were: Interview, Questionnaire, and Observations which were illustrated with charts and (Chi-square). It starts with the background of the study up to the final recommendation to the higher
CHAPTER ONE OF THE STUDY
Capital occupies a vital position in any business in which a bank is included capital is particularly important in the banking industry, that is adequacy is a comfort to the depositor or the shareholder. The bank is to be adequately capitalized in order to perform its role in building the nation's economy.
According to the editorial of Nigeria bankers (2003) “The nature of Nigeria banking industry was healthy and sound from the independence in 1960 to their deregulation and the liberalization of the industry which started kin and middle of the 1980s, the situation changes drastically since the manifestation of bank distress that subsequently cleared the life of 37 banks from 1994 to 2003 in which their problems can be traced bank to the undercapitalization of these banks.
The National Economic Empowerment and Development (NEEDs) 2004, is the initiative of the Obasanjo’s administration aimed at reforming the entire economy of the nation Nigeria. Under the NEEDs, the financial service in clear with the country is to reform, given clear with the country are to be reformed, given that “the success of NEEDS will depend in part on the ability of the financial intermediaries to play their roles by adopting the strategy of addressing low capitalization, the poor governance practice of financial intermediaries that submit inaccurate reformation to regulatory authorities and to strengthen and rationalize the regulatory and supervisory framework in the financial sector.
The reform agenda under NEEDs is saying categorically that the low capitalization of banks must be death with achieving the goals of NEEDs.
According to Sanusi (2005) “The new capital accord, base II of 1998 tackle the issue of capital at the inception, the major element of the based committee of the 1998 capital accord included the explicit unmake of the capital requirement to a bank question and degree of risk and establishment of internationally, comparable minimum capital requirements. Combining the objectives of the National Economic Empowerment and Development Strategy (NEEDs) and that of the new capital accord based II of 1998 it will be deduced that up with the global economic and financial trend and ensigncy the economic development of Nigeria.
Ogunniyi (2005) is of the opinion that the Central Bank of Nigeria as empowered by BOFIA from time to time determines the minimum paid-up share capital of categories of the bank in Nigeria in which there was an upward review from time to time. The issue of recapitalization to banks to the time of #25 billion was announced by CBN governor Charles Soludo on the 6th July 2004 generated a lot of controversies but if practically examine, it is what the nation needs for overall economic growth.-->