EFFECT OF BANK CONSOLIDATION ON KEYSTAKEHOLDERS OF COMMERCIAL BANKS IN NIGERIA’S NIGER DELTA REGION BYDICKSON, RACHEALPG/Ph.D/04/38060DEPARTMENT OF MANAGEMENT, FACULTY OF BUSINESS ADMINISTRATION, UNIVERSITY OF NIGERIA, ENUGU CAMPUS

EFFECT OF BANK CONSOLIDATION ON KEY STAKEHOLDERS OF COMMERCIAL BANKS IN NIGERIA’S NIGER DELTA REGION BY DICKSON, RACHEAL PG/Ph.D/04/38060 DEPARTMENT OF MANAGEMENT, FACULTY OF BUSINESS ADMINISTRATION, UNIVERSITY OF NIGERIA, ENUGU CAMPUS 2013 EFFECT OF BANK CONSOLIDATION ON KEY STAKEHOLDERS OF COMMERCIAL BANKS IN NIGERIA’S NIGER DELTA REGION BY DICKSON, RACHEAL PG/Ph.D/04/38060 A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF Ph.D IN MANAGEMENT, DEPARTMENT OF MANAGEMENT, FACULTY OF BUSINESS ADMINISTRATION, UNIVERSITY OF NIGERIA, ENUGU CAMPUS SUPERVISOR: Prof U.J.F EWURUM 2013 DECLARATION I, Dickson, Racheal, a postgraduate student in the Department of Management with Registration Number PG/Ph.D/04/38060 hereby declare that the work incorporated in this thesis is original and has not been submitted in part or in full for any other Diploma or Degree of this University or any other Institution of higher learning DICKSON, RACHEAL PG/Ph.D/04/38060 APPROVAL This thesis has been approved for the Department of Management, Faculty of Business Administration, University of Nigeria Enugu Campus, by Prof U.J.F EWURUM SUPERVISOR …………………………… DATE Dr V.A ONODUGO HEAD OF DEPARTMENT …………………………… DATE DEDICATION This project is dedicated to my Husband, Hon Henry Seriake Dickson, the Executive Governor of Bayelsa State, who sponsored my programme, for his love, care and understanding and unrelenting efforts at making sure the Ph.D programme was a success ACKNOWLEDGEMENTS I wish to acknowledge firstly the Almighty God for His favour and mercy in seeing me through this study; praise be His name I also want to thank my Supervisor Prof UJF Ewurum, former Dean, Faculty of Business Administration, University of Nigeria, Enugu Campus for his untiring effort in going through this study I also wish to express my profound gratitude to Dr V.A Onodugo, Ezigbo, Head, Department of Management and to all the lecturers in the Department of Management, notably Dr O Ugbam, Dr Charity, Dr E.K.Agbaeze, Dr Ann Ogbo, Dr B.I Chukwu and C.O Chukwu, for their immense contribution towards the successful completion of my PhD programme Other staff of the Department and Faculty, particularly the current Dean, Prof (Mrs) Ugwuonah, also deserve special mention for facilitating the completion of the programme May the good Lord bless you all and reward you abundantly for your encouragement and moral support I also appreciate the contributions of the Board and staff of School of Postgraduate Studies and the university community in general who laboured in various ways to see me through this doctoral programme God bless you all My profound gratitude goes to the Library of University of Nigeria, ICT, and Afrihub all of Enugu campus of UNN for their assistance in my secondary data collection as well as my computer typists for their efforts in the preparation of drafts and production of the thesis Racheal Dickson TABLE OF CONTENTS Approval ii Certification iii Dedication iv Acknowledgements v Abstract vi List of Tables x CHAPTER ONE: INTRODUCTION 1.1 Background of the Study 1.2 Statement of the Problem 1.3 Objectives of the Study 1.4 Research Questions 1.5 Research Hypotheses 1.6 Significance of the Study 1.7 Scope of the Study 10 1.8 Operational Definitions of Terms 10 1.9 History of Nigerian Banking Industry and the Nigeria Niger Delta Region 1.10 Profile of the Nigerian Niger Delta Region 15 References 17 11 CHAPTER TWO: REVIEW OF RELATED LITERATURE 2.1 Introduction 2.2 20 Conceptual Framework 20 2.3 Theoretical Framework 23 2.4 Empirical Review: Prior Researches on Bank Consolidation 27 2.4.1 Bank Consolidation and Human Resource Issues 27 2.4.2 The Value Effects of Bank Consolidation 28 2.4.3 Bank Consolidation and Efficiency of Financial Intermediation 40 2.4.4 Bank Consolidation and Organisational Performance 48 2.4.5 Bank Consolidation and Managerial Role and Commitment 58 2.4.6 Bank Consolidation and Commercial Borrower Welfare 64 2.5 Summary of the Review of the Related Literature 68 References 70 CHAPTER THREE: RESEARCH METHODOLOGY 3.1 Introduction 83 3.2 Research Design 83 3.3 Nature and Sources of Data 83 3.4 Population of the Study 83 3.5 Pilot Survey 84 3.6 Sample Size Determination 85 3.7 Sampling Procedure 86 3.8 Research Instrument 87 3.9 Validity of the Instrument 88 3.10 The Reliability of the Instrument 88 3.11 Techniques for Data Analysis 90 References 91 CHAPTER FOUR PRESENTATION AND ANALYSIS OF DATA 4.1 Introduction 92 4.2 Presentation of Data 92 4.3 Test of Hypotheses 135 4.4 Discussion of Results 143 References 147 CHAPTER FIVE SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS 5.1 Summary of Findings 148 5.2 Conclusion 149 5.3 Recommendations 149 5.4 Contribution to Knowledge 151 5.5 Suggestion for Further Studies 151 Bibliography 152 170 Appendices LIST OF TABLES Table 4.1 Response Rates of Respondents in the Niger Delta Region 92 Table 4.2: Do you agree that Bank Consolidation have had an effect on the Role Managers in the Bank? 93 With Bank Consolidation, Bank Managers now perform their Managerial Functions of Planning, Organising, Directing and Control very well? 94 With Bank Consolidation, Bank Managers Discharge their Responsibility Creditably? 96 With Bank Consolidation, CEOs now see great Reputational Benefits? 97 Managers in the Post-Consolidation Era of Banks are now highly committed to their jobs? 98 With Bank Consolidation, Managers are no longer committed to their functions? 100 Table 4.8 Consolidated Response to Objective one 101 Table 4.9: Consolidation Policy of the Central Bank has an effect on the General Performance of your Bank? 103 Banks in this Post-Consolidation Era are now doing well in Terms of Profitability and Services to Customers? 104 With bank Consolidation, Profit has Increased due to the Increase in Capital Necessitated by the Consolidation Policy of the Central Bank of Nigeria? 106 Table 4.12: Bank Consolidation has Improved the Operating Efficiency of Banks? 107 Table 4.13: Operating Costs are well Managed as a Result of the Bank Consolidation? 108 Table 4.14 Consolidated Response for Objective Two Table 4.15: Table 4.3: Table 4.4: Table 4.5: Table 4.6: Table 4.7: Table 4.10: Table 4.11: Table 4.16: 109 To what extent you agree that the Consolidation Policy of the Central Bank has positively influenced the Rate of Job Creation of banks in the region? 111 With bank Consolidation, Employees are no Longer comfortable with their jobs; 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objective of this study is to assess the impact of consolidation policy on management and other key stakeholders of commercial banks in Nigeria’s Niger Delta Region and this questionnaire has been designed to enable me collect information for the research All information you provide will be treated with strict confidence and shall be used strictly for academic purpose Your kind assistance is hereby required in filling this form Thanks for your co-operation Yours Faithfully, Dickson, Rachael PG/Ph.D/04/38060 183 APPENDIX II QUESTIONNAIRE SECTION A: BIODATA (Please, tick the one you think is most appropriate) Sex: (a) Male [ ] b Female [ Age group : (a) 20 – 30 years [ ] (b) 30 – 40 years [ Marital Status: (a) Single [ (b) Married [ Educational level: ] (a) Primary education [ (c) Tertiary education [ ] ] ] (c) 40 years and above [ ] ] ] (b) Secondary education [ ] (d) No formal education [ ] Position of Respondent: (a) Management Staff [ ] (e) others [ ] (b) Non-Management Staff [ ] SECTION B: Objective No 1: Effect of bank consolidation on managers role and commitment in the bank Strongly Agree Undecided Disagree Strongly Disagree To what extent you agree agree bank consolidation has had significant positive effect on the roles of managers in the bank? Strongly Agree agree Undeci- Disagree ded With bank consolidation, bank managers now perform their managerial functions of planning, organising, directing, and controlling very well With bank consolidation, managers discharge their responsibilities creditably With bank consolidation, CEOs now see great reputational benefits 184 Strongly disagree 10 Managers in the post-consolidation era of banks are now highly committed to their jobs 11 With bank consolidation, managers are no longer committed to their functions Objective No 2: Effect of bank consolidation on organisational performance 12 To what extent you agree that the consolidation policy of the central bank had significant positive effect on the general performance of your bank? 13 Banks in this post-consolidation era are now doing well in terms of profitability and service to customers 14 To what extent you agree that profit had increased due to the increase in capital necessitated by the consolidation policy of the central bank of Nigeria? 15 Bank consolidation has improved the operating efficiency of banks 16 Operational costs are well managed Objective No 3: Effect of bank consolidation on employment creation 17 To what extent you agree that the consolidation policy of the central bank has positively influenced the rate of job creation of banks in the region 18 With bank consolidation, employees are no longer comfortable with their jobs; they always fear losing their jobs 185 Strongly Agree agree Undeci- Disagree ded Strongly disagree Strongly Agree Undeci Disagree Strongly ded disagree 19 Bank consolidation had led to job losses at the executive, general management, senior and junior staff cadre 20 With bank consolidation, employees now resort to active and passive resistance to protest and resist job losses Objective No 4: Effect of bank consolidation on worker job satisfaction 21 The consolidation policy has enhanced employee job satisfaction 22 With bank consolidation, salaries are paid regularly and worker’s needs are well attended to 23 With bank consolidation, workers derive greater pleasure in performing their roles Strongly Agree Undeci Disagree Strongly ded disagree Strongly Agree agree Objective No 5: Effect of bank consolidation on shareholder’s wealth value 24 Bank consolidation has greatly improved the value of shareholder’s wealth 25 Bank consolidation has led to higher returns to shareholders investment Objective No 6: Effect of bankconsolidation on commercial borrower welfare 26 Bank consolidation has greatly improved commercial borrower welfare 186 Undeci- Disagree ded Strongly disagree 27 Commercial borrowers are dissatisfied with the post-consolidation lending practices 28 Bank consolidation has led to a decline in customer welfare 29 Bank consolidation customer welfare has Strongly Agree Undeci Disagree Strongly ded disagree enhanced INTERVIEW SCHEDULE Please let us know how the Nigerian Bank consolidation affects bank managers in the discharge of their functions / roles and commitment Has bank consolidation led to improved performance of Nigerian commercial banks? In terms of employment creation (generation) how you see Nigeria bank consolidation? Do bank workers now experience greater job losses? Are workers generally happy with bank consolidation? Is worker satisfaction generally high? Has bank consolidation led to increase in shareholder wealth value? Are they happier? How does bank consolidation affect commercial borrower welfare? 187 188 ... commitment of commercial banks in Nigeria’s Niger Delta Region, and difficulty in ascertaining the effect of bank consolidation on performance of banks in Nigeria’s Niger Delta Region, the difficulty in. .. creation in commercial banks in Nigeria’s Niger Delta Region, and the difficulty in determining the effect of bank consolidation on commercial 19 borrower welfare in commercial banks in Nigeria’s Niger. .. commitments of commercial banks in Nigeria’s Niger Delta region H2 Bank consolidation has significant positive effects on performance of commercial banks in Nigeria’s Niger Delta Region H3 Bank consolidation