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  • Background to the Study

Globalization is the act or state of becoming world wide in scope and application. Financial globalization is being driven by advance in information technology (IT), liberalization of restriction on capital flows, deregulation of domestic markets and greater competition among markets and institutions.

The concept of Universal Banking (UB) is new to the Nigeria financial system and it was introduced in October, 1998 (Aguwamba, 2004). However, the central bank of Nigeria (CBN) only approved the guidelines for its implementation from  January, 2001 (CBN, 2001)

The concept of Universal Banking has in recent time remained a contemporary subject of discuss especially on the readiness of the Nigeria banking industry for the system the banking is respected to give the bank right  depending on its corporate objective and core competence to engage in any financial service ranging from accepting, deposit, lending trading in financial instruments foreign exchange transaction underwriting of debts, equity issues, brokerage real estate, mortgage, leasing investment and possibility insurance.

This concept is obviously a direct consequence of the globalizations wake, which is now turning the world into a global village for operators in different sectors of human endeavors. The expectation is that such Universal Banking would be allowed to engage in all fields of financial service comparable to that of any point of the world. The Universal Banking concept would also encourage banks to operate in manners, which will bring all financial services under one roof for the convenience of the customers., the ability of Nigerian banks to satisfy and retain their customers in the present post-consolidation era will no doubt depend largely on the development of their information technology (IT) infrastructure,. The Universal Banking is one of the latest functional banking systems, its objective to get maximum profit by way of interest; fess based on income and commission through various diversified activities (More, 2010).

Universal Banking is a system in which banks provide a wide variety of financial services. Universal Banking is common in some European countries including Switzerland.

Universal Banking, traditionally believed to have started in Germany, in the 1850’s had spread to most of continental Europe where banks now pose as supermarkets for financial service in leading financial centers of the world.

Based on forgoing this research work (study) examines effect of the introduction of Universal Banking on the performance of Deposit Money Banks in Nigeria. This study will take into consideration Return on Asset (ROA) as variable of the bank’s performance in the Deposit Money Banks in Nigeria.

  • Statement of the Problem

the decision of the apex bank to shut down the operation of subsidiaries of some of the nations Deposit Money Banks has continued to cultivate fear not only in the mind of the banks stockholders, but also the employees of the various subsidiaries. The action is seen as measure to attain specialized and sound banking culture among the banks in Nigeria. Most Nigerian banks have weak capital base, even for those banks that have met the minimum capital requirement hence the operation of the banking system was nothing to write home about.

Universal Banking has been considered as one of the most vital element affecting Nigeria Deposit Money Banks performance. It is the focus upon which all activities of the financial system are accomplishing.

The Central Bank of Nigeria (CBN) had previously raised alarm that Universal Banking was the main factor responsible for the 2009 banking crisis in Nigeria. The central bank of Nigeria governor, then, Malam Sanusi Lamido Sanusi, maintained that emergence of Universal Banking has help corrupt channel funds from one subsidiaries to another, thus there was liquidity where as there was a big hole.

This research work aims to ascertain the consequences of the Universal Banking in Nigeria whether have led to the growth and development of Deposit Money Banks or not.

  • Research Questions

The researcher has formulated the underlets questions which according to he will provide the basis of carrying the research in line with the objective of the study.

  1. Does Universal Banking have direct bearing on performance of Deposit Money Banks in Nigeria?
  2. Does Universal Banking have impact on the Asset base of Deposit Money Banks in Nigeria?
  • Has Universal Banking increased the profitability of banks in Nigeria?
  1. What are the likely regulatory challenges imposed by the adoption of Universal Banking system.
  2. Which among the three (ATM, EMB and POS) financial service delivery yield most on Return on Asset (ROA) of Deposit Money Banks in Nigeria?


  • Objectives of the Study

The specific of the study were to:

  1. Examine the impact of Automated Teller Machine (ATM) on the Return on Asset (ROA) of Deposit Money Banks in Nigeria.
  2. Assess the impact of electronic mobile banking on the Return on Asset (ROA) of Deposit Money Banks in Nigeria.
  • Examine the impact of point of sales (POS) on the Return on Asset (ROA) of Deposit Money Banks in Nigeria.
    • Research Hypothesis

HO1: Automated Teller Machine (ATM) transaction has no significant impact on the Return on Asset (ROA) of Nigerian Deposit Money Banks, (DMBS).

HO2: Electronic Mobile Banking (EMB) has no significant influence on the Return on Asset (ROA) of Nigerian Deposit Money Banks (DMBS).

HO3: point of sale (POS) has no significant effect on the Return on Asset (ROA) of Nigerian deposit money banks (DMBS).

  • Scope and Limitation of the Study

scope:  the banking system being the most sensitive subsection in any financial system can also not be ignored hence, the research was intended to limits its analysis on the  study of the impact of Universal Banking  on the Return on Asset (ROA) of Deposit Money Banks in Nigeria.

Limitations:    In carrying out research, the researcher encountered numerous problems that militated in smooth and sound operation of the work. Notably among them were finance and time constraints. However, in spite of these difficulties the researcher wishes to work within the framework of little data available from internet and central bank of Nigeria (CBN) as an institution.

  • Significance of the Study

following the approved in principle of the adoption of the concept of Universal Banking in Nigeria, eminent Nigerians, policy making participants and the operators in the nation’s financial market and general public have been engaged in series of covering and diverging views concerning the suitability or other wise of the Universal Banking system in the nation’s financial system. Hence the research work will be of immense benefit to the banking industry where the concept in question will be noted. Moreover, the nation’s regulatory and supervisory authorities will equally benefits greatly from this work.

This essay will be of importance not only to the financial system but also to the shareholders prospective investors who are willing to invest with the banks but are having doubt.

Finally, the study posses some academic value that would be of additional contribution to existing literature as well as the guide for future research work by students, other researchers and the interested public can benefit from this work.

  • Definition of Operational Terms

The following terms are defined in context of the research study:

  • Universal Banking:- is a system in which banks provide a wide variety of financial services.
  • Universal banks:- these are financial institutions that can act as a supermarket for the delivery of the whole range of financial service.
  • Return on Asset (ROA):- is an indicator of how profitable a company is relative to its total assets.
  • Deposit Money Banks (DMBS):- A financial institution licensed by the regulatory authority to mobilize deposits from the surplus units and channel the funds through loans to the deficit unit and performs other financial services activities.
  • Automated Teller Machine (ATM):- is an electronic telecommunication device that enable customers of financial institutions to perform financial transactions, such as cash withdrawals, deposit, transfer funds or containing account information, at any time and without the need for direct interaction with bank staff.


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