the effect of deposit on banks lending and risk management

📄 Project Abstract

The Nigerian Banking Industry for the past decades has witnessed series of Banking distress and subsequent failures. Banks that had been doing well suddenly announced large losses due to credit exposures that turned sour, interest rate position taken or derivate exposures that may or may not have been assumed to hedge balance sheet risk. In response to this, there is indeed urgent need for banks in Nigeria to devote enough attention to the management of financial risks in the Nigerian Banking Industry. The 1989 annual report and statement of account of NDIC revealed that classified loans and advances or bad debts amounted to 9.4 billion which contributed 40.8 percent of total loans and advances and 280 percent of shareholders funds (Hall, 1991:8). It is the development of his nature that have led to the introduction of the CBN prudential guidelines for banks. Cooker (1989:115), observes that the main function of a bank is the collection of deposits from those with surplus cash resource...