Pre and Post Banking Sector Consolidation of Selected Commercial Banks’ Performance in Nigeria

ABSTRACT

This study compared the pre and post banking sector consolidation periods performance of some selected banks’ in Nigeria, for the period 1997-2014. The performance indicators of the selected banks were limited to total equity, total assets base and profit after tax. The study adopted ex-post facto research design using secondary sourced data extracted from the published financial reports of the selected banks. Three banks selected were United Bank for Africa Plc, First Bank of Nigeria Plc and Union Bank of Nigeria Plc. The analysis was done using paired sample t-test for significance of difference in means between the pre and post Nigerian banking sector consolidation periods. The results obtained showed that significant differences exist in the pre and post consolidation profit after tax of First bank and United Bank for Africa, while that of Union Bank of Nigeria Plc was not significant. As it relates total equity, the mean differences for First Bank of Nigeria Plc and Union Bank of Nigeria Plc are not significant, while that of United Bank for Africa is significant. Furthermore, the mean difference in pre and post consolidation asset base of First Bank of Nigeria Plc and United Bank for Africa were all significant, while that of UBN was not. The conclusion therefore is that banking sector consolidation in Nigeria have significant impacts on performances of First bank Nigeria Plc and United bank for Africa, but seem not to had the desired significant impact in the performance of Union bank Plc. Based on the above findings the study recommends that the top management of First bank Nigeria Plc and United bank for Africa need to sustain its current efforts in order to maintain their positive performances, while that of Union bank Plc must develop strategies to change the direction of her performance in the desired direction. This can be achieved through increased investment in human capital development for improvement in competences and capacity of employees.

Keywords: Banking, Consolidation and Performance