EMPIRICAL DETERMINANTS OF BANK DISTRESS IN NIGERIA

📄 Project Abstract

In many societies, liquidation is an unpleasant word because of its negative connotations. It connotes wiping out what was once in existence, winding up a company, killing what was once alive or destroying what had been carefully built over time. When the word is applied after a bank, it is even more frightening. This is so because banks are expected to be safe havens for people's money and valuables; thus the thought of liquidating such havens is understandably uncomfortable. The discomfort arises from the potential losses that might be sustained by the banks' stakeholders, namely depositors and the society at large (NDIC, 2008: 2). With many banks in Nigeria classified as distressed, some licenses withdrawn and some banks acquired by the Central Bank of Nigeria (CBN) at a shameful purchase price of N1 per bank, the issue has ceased to be whether banks will fail or not (CBN / NDIC, 1995). Almost every concerned person is rather asking what will be the possible causes of bank distress,...