• Background of the Study

Financial institutions are institutions that provide financial services for their clients or members. The most important financial services provided by the financial institutions is acting as financial intermediaries.

These institutions comprise of both banks and non- bank institution which both plays a fundamental role in the development and growth of the economy and this is necessary to ensure its soundness as the effectiveness and efficiency in performing these roles.

The main aim of this banking or financial institution is the granting of loans and the internet of this loan from part of their source of Income. But in the process of granting of this loan and advances bank default.

Experience has showed that most projects in the country do not live up to expectation of the bank and the anticipated returns may elude them. And most times, the project may not be in a position to fulfill their loan drawings obligation with even the principal repayment not forth coming from their project. And this situation usually results in bad and doubtful debt thus putting the bank in difficult position as this debt usually written off.

In light of the above, managers of this financial institution are with problems of managing the limited resources due to debt default.

And when this happens it is noted that the maximization of profit and maintenance of adequate liquidity which is the cardinal objective of bank will definitely be hindered. For this reason, it is important therefore for bank to initiate or come with different recovery measures to help check the issue of bad debt.

The growing propensity of bank to recover their debt and reduce their credit exposure has made it necessary to address the issue of debt management in financial institutions. This study therefore intends to examine and discuss the measures prudence adopted by banks.

First bank of Nigeria, plc as a financial institution is not free from these debt management crises. Though enough measures have been put in place for the prevention of debt in the bank yet it’s noted that some cases of bad debts and doubtful debts are still recorded in recent time in the bank.

First bank of Nigeria plc which commenced operation in Nigeria in 1894, British West African Limited was incorporated as a private limited liability company in 1970 and converted to a private public company in 1977.

The bank shares are quoted on the Nigeria stock exchange (NSE). With 760 branches, the bank maintains the larget branch network in the banking industry in Nigeria. At the turn of unique position despite its size and reputation, there were challenges to maintain the leadership positioning a market that was dynamic as it was competitive. It was at this point that the bank launched its business transformation initiative called “century” clearly identified as an enable for the bank going forward.

First Bank of Nigeria plc needed to add here to the regulatory requirement imposed by the central of Nigeria (IBN) as well as the common business practice followed by Nigeria banks. Since no two works is exactly the same way, the bank specific requirements were also important. The central bank increasingly proactively role in regulating the industry to bring it up to speed with international trend meant the bank had to remain agile in order to survive and come our winner.

With sophistication of customer requirement and increased competition, the bank critical requirement was not only to meet the existing demands of the customer but also to stay agile and not the changing requirements going forward.

With Accenture as consultant, first bank of Nigeria embarked on a global search for strategic it partner who would enable them to make this quantum leap. An application selection model was developed, which involved looking at over 50 core bank solutions from across the world. Eventually with its finals solution emerged as the clear winner.

One of the pillar of final value position to first bank of Nigeria, plc was it new generation solution architecture, designed to help the bank build an agile business through innovative offering to the market and a significantly superior speed of response to customer, competitive proven track record of 100% successful implantation across the global which offered the bank the alternative proposition of minimized risk.

First bank of Nigeria, plc piloted on final in six month and since then has rolled out the solution to over 170 branches, on time and within budget.

First bank of Nigeria’s unique requirement were catered to using final extensibility working infrastructure that enables the bank to customize its specific requirement without touching the source code. This provided significant time to market advantage to the bank and enabled them to design and launch new product offering quickly.

Regular version upgrades over the years have provided increased and more sophisticated functionality to the bank as the relationship has progress the new generation flexible architecture of finacle has ensured 2714 operability with close to 100% uptime, a feature of immense importance in a country not for fail safe network connectivity.

Final technological superiority and functional richness were important factors but its proven ability to scale up to first bank of Nigeria’s explosive growth plans was the clinch. Final successfully met first bank of Nigeria’s expectation of the solution Bering able to scale up and be the vehicle of growth to meet the emergency global challenges in the financial area.

The new generation architecture of final fully web. Enabled, with powerful and unique capabilities such as straight through processing (STP), workflow, scalability and true 2417 banking across multiple delivery channels has enabled the bank to streamline its operations.


  • Statement of the Problem

The fundamental role banks and non- banks financial institution is to intermediate between the surplus and deficits sector of the economy.