ASSET MANAGEMENT IN NIGERIAN BANKS: AN EMPIRICAL INVESTIGATION

TABLE OF CONTENTS
Title Page
Certification
Dedication
Acknowledgements
Abstract
Table of Contents
CHAPTER ONE
INTRODUCTION
1.1 General Description of Area of Study
1.2 Statement of the Problem
1.3 Objective of the Study
1.4 Relevant Research Questions
1.5 Statement of Research Hypothesis
1.6 Significance of the Study
1.7 Scope and Limitation of the Study
1.8 Definition of Terms and Abbreviations
CHAPTER TWO
2.0 Theoretical Frame Work
2.1 Introduction
2.2 Principles of Asset Management in
Nigerian Banks
2.3 Conceptual Frame Work.
2.4 Empirical Evidence
2.5 Gap in Literature
CHAPTER THREE
3.0 Researcher Methodology
3.1 Research Design
3.2 Characteristics of the Study Population
3.3 Sampling Design and Procedures
3.4 Data Collection Instrument
3.5 Validity and Reliability of Instrument
3.6 Administration of the Data Collection Instrument
3.7 Procedures for Processing and Analyzing Collected Data
3.8 Limitations of the Methodology
CHAPTER FOUR
4.0 Presentation and Analysis of Data
4.1 Introduction
4.2 Descriptive Analysis of Respondents: Demographic Variables
4.3 Test of Hypothesis

CHAPTER FIVE
5.0 Summary, Conclusion and Recommendations
5.1 Summary
5.2 Conclusion
5.3 Recommendation
Bibliography
Questionnaire
Appendix

CHAPTER ONE
INTRODUCTION
1.1 GENERAL DESCRIPTION OF AREA OF STUDY
Irrespective of the kind of activity run in an organisation be it profit making or not, there is a need to keep records of the life span and usage of it assets. This is true since assets determine the true worth of a business.
In business organisation however, this fact cannot escape notice since assets form the baseline of organisation existences put in other words, a business with no assets is no business at all
Asset in business organisation are generally classified into two (2) main categories viz; ‘Fixed’ and ‘Current’ assets (non fixed). Usually, the managers of the business. Hence, the need for proper accountability by those custodians.
The Nigerian Banking industry is one which breeds and nurtures the banks found in the country. These banks are established to serve the public even through they have their individual interest to pursue.
Of these banks are Union Bank, Wema Bank, Eco Bank, First Bank and Access Bank of Nigeria Plc, which they stands tall among the crowds, being privileged to be among the first generation banks in the nations of banking industry. The Bank acts in a position of stewardship, this one of its priorities is to ensure that a proper management of their asset are maintained.
The primary function of top management cadre. This indicates that they are the guiding factors that determine the efficiency and effectiveness of the entire management. They ensure the administration and control of the banks’ policies and stated objectives. These include the acquisition, installation depreciation and finally the disposal of their assets.
Nonetheless, it could be pertinent to mention that several methods of arriving at value for depreciation of asset shall be considered in a subsequent chapters of this project.
Finally, the application of the policy of this bank mention above, towards the management of their asset would be the focal point of this study.
1.2 STATEMENT OF THE PROBLEM
The major problem in the asset management prompting this study is the policy of 5 quoted banks used in this project towards the general treatment of and the application of depreciation to their assets.
Without doubt, this affects the forth and fairness of its financial report.
These problems are as follows:
i) There is no proper demarcation of assets through grouping
ii) Disposal of assets are not properly account for.
iii) Assets with completed life cycle but still useful to the bank are not properly accounted for
iv) Improper accounting for assets damaged before completing their life cycle.
v) The effect of the current method of depreciation in use by the organisation on the profit of the business.
1.3 OBJECTIVE OF THE STUDY
The study shall highlight and analyse the problems listed in above. Further, its objectives are to;
 Draw reason companion using available relevant general accounting standards.
 Check whether the organisation, in use, complies with its accounting policies.
 Show possible categories of grouping of fixed assets.
 Evaluate the effects of the observed short comings on the financial statements and the users of the information contained therein.
 Proffer advice on choice of rates for and methods of depreciation for specific assets.
1.4 RELEVANT RESEARCH QUESTIONS
The questions are aimed at guiding the minds of the readers to a means of showing the problems as stated above. It is hoped that by the conclusion of the project, the question would have been fully answered.
The questions are;
i. How are assets grouped?
ii. Does the grouping of assets for purpose of depreciation effect individual
value of assets?
iii. How are assets accounted for if estimated life cycle is completed but are
still useful (or used in the bank)?
iv. No what basis does the bank revolve its assets?
v. How are asset disposed?
vi. How are assets accounted for if disposed the completion of their
estimated life?
1.5 STATEMENT OF RESEARCH HYPOTHESIS
HYPOTHESIS I
Ho: Straight line method of depreciation is most suitable for depreciation of assets in Banks
Hi: Straight line method of depreciation is not suitable for depreciation of assets in Banks
HYPOTHESIS II
Ho: Depreciation is to be continued even if asset appreciation in value
Hi: Depreciation is not to be continued even if asset appreciation in value
HYPOTHESIS III
Ho: Depreciation of assets affect the declared profit
Hi: Depreciation of assets does not affect the declared profit
1.6 SIGNIFICANCE OF THE STUDY
Undoubtedly, this study shall be of utmost relevance to the field financial accounting and financial management.
It shall be relevant to the Nigeria Banking, as every bank has a considerable amount of assets which it frequently manages.
It relevance shall also be to the management, share holders, and other users of five banks and other banks in Nigeria.
It is also important to conclude that the significance of this study cannot overemphasized. This is all the more, especially so as it intends to make a huge and positive impact on the subject to management.
1.7 SCOPE AND LIMITATION OF THE STUDY
The study shall border around the general management of the asset management in Nigeria banks into particular references to the five stated bank.
Three major departments shall be used to get relevant data and information. These are the chief Accountant Department, the Administration Department and the premises Department.
There shall be close examination of treatment of assets which will from time to time be referred to as ‘asset’
Limitation; Time factor:- There is no enough time to carryout the study as expected and financial constraint was another major constraint.

 

1.8 DEFINITION OF TERMS AND ABBREVIATIONS
1. Depreciation Asset Item is:
i have live over one year
ii. are acquired primary for use in production of goods and services for an enterprise
2. Depreciable Value: That part of the net book value of a depreciable asset that an enterprise may allocate to future operations through depreciation.
3. Depreciation the allocation of the depreciable amount of an asset over its estimated useful life1. It is also the measure of the wearing at or loss of value of asset2.
SAS as define as representing “an estimate of the production of the historical cost or revolved amount of assets chargeable to operations during an accounting period3.
4. Estimated useful life of an asset: Is the shorter of
i) Its predetermined physical life.
ii) The economic life during which it could be profitable employed in the operations of the enterprise.
5. Asset: – Asset used in the production of sale of other assets or services that have a useful life of longer than one accounting period4. According to SAS 3, They have been acquired “for use in the production supply of goods and services and may include those hold for maintenance or repair of such assets and not intended for sale in ordinary course of the business”5.
6. Management:-The process of coordinating and integrating activities so that they are completed efficiently and effectively with a through other people6. It is the process of allocating an organization’s input by planning, organizing, directing and controlling for the purpose of producing output in order to accomplish organization’s objectives’.
7. Net Book Value:- Is the amount (historical cost or valuation) at which an asset is carried in the books less the related accumulated depreciation.
8. Recoverable Amount:- Is the part of the Net Book value of an asset that the enterprises can recover in future through depreciation of the item, including its net realization value on disposal.
9. Residual Value:- Is the estimated net amount recoverable from disposal of an asset after its expected useful economic life.
Revaluation (of Depreciable Assets):- Is the upward or downward review of the value of an asset giving regard to its current state and the prevailing economic and market condition.
UBN PLC:- Union Bank of Nigeria Plc
Disposal:- The end of the usage of an assets item. This is usually by means of sales.

 

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