THE IMPACT OF CAPITAL ADEQUACY ON BANK PERFORMANCE: EVIDENCE FROM COMMERCIAL BANKS IN NIGERIA

CHAPTER ONE

INTRODUCTION

1.1     Background to the Study

The downturn in the nation’s economy ever since termination of the Republic in 1984 and coming of the military thereafter is no longer news. Series of efforts by the various government whether sincere of insincere towards improving the betterment of the economy are also appreciated. Of importance to any economy is the financial market which comprises of both Capital Market and Money Market of lich commercial bank is an integral part. Ever since the establishment of the first commercial bank more than a century ago, the industry has witnessed a lot of topsy-turvy depending on government policies and regulations. 

Years before introduction of structural adjustment program (SAP) in 1986, there were few banks working in a regulated environmentand with the coming of SAP the whole economy became porous courtesy of the regulation syndrome occasioned by preaching and teaching of SAP. What became the order of the day were the proliferation of banks and other financial institution. The banking sector was so bastardized that every nook and corner there sprang up banks. What is witnessed today is that these banks are in form of distress, which is now history.