THE ASSET AND LIABILITY MANAGEMENT IN DEPOSIT MONEY BANK IN NIGERIA

CHAPTER ONE

1.1   INTRODUCTION

          There are some complex problems which are common in almost all financial institutions. One of these problems is assets and liability management. Proper analysis and diagnosis of this crucial task of any financial oriented organization has been neglected or over looked in the past and has led to the folding up of some financial institutions like forum investment and national bank of Nigeria Plc to mention a few.

          It should be noted that National Bank Plc is now coming up through divine touch and effective management of assets and liability concepts.

          It will be of utmost importance of analysis to some extent what constitutes assets and liability management at early stage, asset can be termed to be in banking as money generated from the service bank rendered to their customers. Management shows how assets and liability should be well properly implemented and managed.

          This aspect entails the proper monitoring of the plan that has been formulated managerially. It has to be monitored so that if there is any deviation from such plans control could be effective to save the situation from getting worse with all the above explanation of managing asset and liability is embodied in the project work.

          Moreover, management of asset and liabilities is being examined in the Nigeria deposit money bank. This project work intends to focus its attention on Skye Bank Plc, on how asset and liabilities can be managed efficiently and effectively in order for all the deposit money bank operations in an economy like the Nigeria for example would be able to achieve its aforementioned objectives in banking industry.

          Generally all deposit money banks are noted are noted to be retail bank, this is because they accept deposit from the entire public in small amount of money.

          Also they operate a vast network branches all over the country unlike the merchant banks that have few branches and for this reason they are called whole sales banks.

          The key functions is the acceptance of deposit from their customer it is then left for them to make judicious use of such money kept with them, the deposit money bank must be able to pay the depositors their money as soon as the customers requested.

          The interest charge on the customer current and other account serves as one of the main source in which deposit money bank get for assets their business.

          The ability of bank to operate towards meeting or attaining its aims will determine success of such bank.

          The research work will not fail to examine the major problem encountered by commercial banks in the management of assets and liabilities activities and processing of fund for the present and future use of such assets.

          In conclusion, there are various types of commercial banks, the management of their fund way by which it should be giving out it investment inform a blend of any means is dependent in a certain procedures and recommendation would be also made to solve the problem in managing the available assets in commercial banking industry using Skye Bank Plc, Ilorin Branch as a case study.

1.2   statement of the problemS

          This study is chosen case study of Skye Bank Plc and the topic entails a very wide range but gracefully limited to Skye Bank in Ilorin branch.

          However, there are relevance and similarities in a various book authorities, management principle and organization performance but to major concern about well recognized bank in Ilorin. Nevertheless in this work fact data are the best and accurate much relevant to the topic chosen.

i. Asset and liability management minimize deposit interest cost by varying applicable deposit rates with the interest sensitivity of specific pools of customer funds.

ii. Asset and liability management written and unwritten commitments to meeting spurts in loan demand even when the regulators seeks in monetarist fashion, to restrain aggregate deposit growth.

iii. Asset and liability management face is bank desire to offset regulatory burdens imposed on them by reserve requirements and deposit insurance fees. In a nutshell, these explanations of asset and liability management rest on three basic concepts.

– The concept of minimization of bank interest expenses

– The concept of the importance of customer relationship

– The concept of circumvention of regulatory instructions.