FINANCIAL PERFORMANCE EVALUATION OF THE NIGERIA DEPOSIT MONEY BANKS (2003-2007): A TIME SERIAL AND CROSS SECTIONAL CASE STUDY OF THREE SELECTED BANKS”

ABTRACT
 
Deposit Money Banks are the backbone of the economy of any country. They are the institutions specifically designed to further the capital formation process through the attraction of deposits and the extension of credit (  Dhanuskodi, Thangavelu, Venkatachalam & Sudalaimuthn, 2007). Despite these important roles, deposit money banks are exposed to financial risks among many other risks. Financial risks reflect possibility of loss associated with liquidity, capital adequacy, credit, profitability and market. These risks, if not properly identified, evaluated, monitored and controlled could jeopardize a bank’s operations or undermine its financial conditions. In extreme cases, it could lead to a distressed or failed bank with its ripple effects on all bank stakeholders such as loss of deposits, investments, employment, credibility by depositors, shareholders, banks staff, and bank regulators, examiners, supervisors and auditors respectively. This Project uses growth models, capital adequacy model, assets quality models, earnings quality models, liquidity models, charts and tables to analyze and evaluate the trend and comparative financial performance of Oceanic Bank International Plc, First Bank Plc and Access Bank Plc for the financial periods spanning 2003 to 2007. Based on the results of the analytical models applied on the ratio type of data collected from the case studied banks, it is discovered that the three reviewed banks are well capitalized. They exhibited a stable trend in the quality of their earning assets and are highly liquid. However, the earnings quality of these banks have been a disturbing one as it continuously moved downwards year-wise. To reverse this declining earnings quality trend, various cost reduction and cost control measures are recommended given the fact that the quality of these banks assets are in good shape.