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.
1.3 RESEARCH QUESTIONS
i. How does the management of asset and liability contribute to the national economy?
ii. What are the advantages of management of asset and liability in deposit money bank?
iii. What are the problems facing management of asset and liability?
iv. What are the effects of controlling of asset and liability by bank?
v. What are the reasons why bank have bad debts?
vi. What are the factors within bank control?
1.4 OBJECTIVES OF THE STUDY
1. To examine the conceptual issue and theories of asset and liabilities management in deposit money bank.
2. To highlight the various sources of fund in asset and liabilities management in deposit money bank.
3. To examine the regulatory authority.
4. To discuss various sources of information of asset and liabilities management in deposit money banks.
1.5 RESEARCH HYPOTHESIS
Hypothesis 1
Ho: Asset and liabilities management have negative effect on bank’s profitability
Hi: Asset and liabilities management have positive effect on bank’s profitability
The statement of hypothesis stated above this
Ho: Represent negative reply or answer
Hi: Represent positive reply or answer
1.6 SIGNIFICANCE OF THE STUDY
This project work will serve as a guide to all the deposit money banks operating in Nigeria on how assets can be effectively managed in order for the banks to be able to meet their aims and objectives (targets).
Firstly, it will serve as a deposit money bank exists to make profit like any other commercial. They accept deposit from their customers and other investment.
         Secondly, it will provide an opportunity to deposit money bank system will be able to maximize profit and have efficiency if they can undergo effective assets and liabilities management.
Also, this study will help the government authorities on how it can draw guideline to foster proper management of asset for the study operation in Nigeria. In addition, this study will guide the individual firms, corporate business that want to joint to banking and liabilities management.
Lastly, it will provide source of material to a student of independent researcher on an issue related to their topic.
1.7 SCOPE AND LIMITATIONS OF THE STUDY
This research intends to carry out research work on the asset and liabilities management in deposit money bank using Skye Bank plc, as a case study.
More so, all policies and variable that constitute the concepts that guide management of asset will be research upon.
However, the research work is constraint to lack of recent and adequate materials, unwillingness of the respondents and the case study to give time replied, lack of co-operation of the study.
However, effect will be made to the researcher face one limitation or the other in the course of carrying out this researcher. Limitation such as financial constraint, lack of adequate time, unavailability of essential textbook and poor attitude of respondents of research work.
1.8 DEFINITION OF TERMS
1. LIQUIDITY: According to Oyetoyan (2008) define liquidity, liquid is the ease with which the asset can be sold (or redeemed) at an unknown future time at a known nominal naira price on short notice and with minimum cost.
2. DEBENTURES: A debentures may be define as a bond, acknowledging a loan, generally under the company’s seal and bearing a fixed rate of interest.
3. ASSET: Asset can be defined as any item of economic value owned by an individual or corporation, especially that which could be converted to cash.
4. LIABILITY: An obligation that legally binds an individual or company to settle a debt.
5. STOCK: The capital raised by a company through the issue of shares.
6.     SHARE: A financial instruments that shows that one owns a part of a company that provides the benefit of limited liability.
1.9 PLAN OF THE STUDY
The research work is divided into five chapters, for the case presentation of the fact and figure.
Chapter one will contain the introduction, statement of research problem, research question, objectives of the study, research hypothesis, significance of the study, scope of the study, definition of key term and plan of the study.
Chapter two deals with the literature review of asset and liability management in deposit money bank, the effect of control findings policies government, reason why banks have part of funding and types of acceptable collateral securities in the Nigeria deposit money bank.
Chapter three consists the research methodology, data collection, source of data, population of the study, sample size, method of data collection, method of data analysis and limitation of methodology.
         Chapter four highlights the idea/analysis and presentation of data, hypothesis analysis of data base on research question.
         Chapter five throws lights on the summary, conclusion and recommendations.
