The on loan facility may abscond from duty

The findings of this study shows that the major
threats to profitability, growth and sustainability of the Nigerian banking industry
within the last 5 years are: economic downturn which signifies the economic
situation of the country; and political instability; unfavorable banking
regulations such as  removal of charge on
transactions (COT) on current accounts, treasure single accounts (TSA), reduced
bank charges; unstable salary thus reducing the scope of loans; huge running
cost due to unstable power supply; bad loans due to huge investments in the oil
and gas sector; poor power supply; low productivity; among others. Also, the
result of this study shows that most customers are not honest especially when
giving a loan as some will take the loan and change their salary to another
bank so that they will not pay. Some customers on loan facility may abscond
from duty and even relocate, thus it is always impossible to get them to pay
back such loan. Also, some customers may die and their families will refuse to
submit their certificate of death to enable the bank claim back their money
from insurance. Some customers may change their job after obtaining such loan
and open another salary account thus abandoning their loan repayment. Also,
inadequate governance and regulatory support; economic recession, high lending
rates coupled with bad loans, poor technology fraud, high overhead cost such as
expense, indirect or fixed expense of operating business; the lack of
innovation to meet up with customers satisfaction; non-performing loan, high
overhead cost. Others include incompetent network providers, poor corporate
governance, lack of improved customers service, lack of technical know-how,
unstable policies by apex bank, foreign exchange scarcity, among others. The
result shows, in the last five years, threats to profitability, growth and
sustainability of the Nigerian banking industry are many which could have
impact on the Nigeria banking sector and thus the economy.

The
findings of this study supported the works of Ogunleye
(2002); Havrylchyk et al.,
(2006) cited in Frederick (2014); Iannotta et al., (2007); Pasiouras and
Kosmidou, (2007); Athanasoglou et.al, (2008); Bikker and Bos, (2008); Alexiou
and Sofoklis (2009) and Garcia-Herrero et al., (2009); Oghojafor et
al. (2010); Anyanwu (2010)
cited by Kalu and Mgbemena  (2015); Krakah
and Ameyaw (2010); Ahmed et al. (2010); Tabak et al. (2011); Ebiringa (2011); Ebiringa
(2011); Dietrich and
Wanzenried (2011); Vazquez et al. (2012); Oke and Adeusi (2012); Ayanda et al. (2013); Rajput et al. (2013); Abaenewe
et al.(2013); Guillén et al. (2014); Ojong et al. (2014); Jegede (2014); Akhisar
et al. (2015); Schubert (2015); Kalu and Mgbemena  (2015); Mahmud et al. (2016); Okoroanyanwu
and Udunze (2016); Abusidiqu Media Ltd (2017); Lawal (2017); Alonso (2017). Also, the finding of this study that innovations in the banking
system do not meet up with customers satisfaction supported the work of Omiunu (2012) that development plans which
include innovations to meet customers satisfaction from other countries may not
work in the environment of developing countries thus, the need to remodel such
strategy to fit into the Nigeria banking environment.

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!


order now

The
findings of this study also reveal that the major strategies deployed to cushion
the threats to profitability, growth and sustainability of the Nigerian banking
industry within the last 5 years are staff downsizing of staff; reversal of
expansion and closure; the increases in fees and commissions; and digitization
of processes and services for cost efficiency due to branches being closed and
staff also being sacked; creating alternating source of income such as
non-interest income through alert charges, ATN fees, etc.; cost containment,
drastic operational cost reduction measures; certain emoluments removed e.g.,
distribution of toiletries to all staff on monthly basis was stopped, redundant
staff were relieved, ceiling in spending was enforced; policy reform by
industry regulation- done by CBN; cost management by various banks; changing of
government; limitation/reduction of loan disbursement; introduction of BVN to
customers; knowing customers before loan is giving; loan recoveries;
rebranding, upgrade of technology; improved security systems; introduction of
alternative channels and reduction of overhead costs; merger and acquisition of
banks; increase of banks capital base to N25 billion; ensuring full compliance
of lending 33% of shareholders fund;, etc. are the major strategies adopted to
cushion the  threats to the
profitability, growth and sustainability of the Nigerian banking industry
within the last 5 years.

Others
include improved customers services, and relationship management; embarking on
mass marketing; interest on saving accounts and bank technology; introduction
of customers friendly products; network improvement; product innovation,
good/improved customer service; public enlightenment on the available bank
services; staff availability; formation of NAFEX to enable importers get
subsidized rate from CBN; intervention of CBN in the FOREX market; staff
rationalization; use of cheaper contract workforce; push towards use of
electronic channels; etc. This implies that the Nigeria banking sector has
deployed a wide array of strategies to cushion the threats to the
profitability, growth and sustainability of the Nigerian banking industry
within the last 5 years. The findings of this study supported the works of Ogunleye
(2002); Tavis (2004); Ebong
(2006); Abdullahi (2007); Okonjo-Iweala and Osafo- Kwaako (2007); Krakah and
Ameyaw (2010);Ofanson et al. (2010); Oghojafor et al. (2010); Olokoyo (2011); Amaeshi and
Ogbechie (2013); Yakubu and
Affoi (2014); Ojong et al. (2014); Deloitte
Touche Tohmatsu Limited (2016); Victor-Laniyan
(2016)

Author:

x

Hi!
I'm Eileen!

Would you like to get a custom essay? How about receiving a customized one?

Check it out