MERGER AND ACQUISITION IN NIGERIA: ANALYSIS OF PERFORMANCE PRE-AND-POST CONSOLIDATION

Abstract The banking reform pronounced on the 6th of July, 2004 had been a major wave towards a diversified, strong and reliable banking sector in Nigeria. This paper examined the mega banks by evaluating their performance four years after the consolidation exercise in Nigeria. It examined the impact of consolidation on performance and considers if there had been considerable improvement on their profitability, liquidity and solvency. In this study, we analyzed the performance ratio of a sample of thirteen (13) mega banks. A descriptive analysis of these performance ratios was carried out. Correlation Analysis was used to test the impact of the consolidation on the performance measurement parameters. We found that, on average, bank consolidation resulted into improved performance. The paper therefore suggests that the bank management should embrace broad product strategies, which could help in generating more income for the banks. They should also embrace diversification and financial innovation in order to produce new products and services. Keywords: Consolidation, Bank reforms, Performance measures, Ratios JEL Classification: G21, G28, G3

The Impact of Creative Accounting and Fraudulent Financial Reporting on Investors Behaviour in the Nigeria Security Market: An Overview

Recent reports of high-profile company failures have cast the spotli ght on creativ E' accounting and ren ewed the call for published financial statements that show a full and accurate picture of a company's performance And position. Ira company fails to provide meaningful disclosure to investors about where it has been, where it is and where it is going, the value of the company may be eroded, and shareholders will lose confidence in the company Af1er the collapse of Enron in 200 I. creative accounting and fraudulent financial reporting have become issues of concern in the nation's llnancial environment. It is clear that the age-old profession of accounting owns its share of creative thinkers. It is also clear that no profession or occupation should be excluded tl·om creativity. Today's news is rift with case after case of mis-reporting of finrlllcial results. Many were a direct result of lim111cial managers taking advantage of "loop holes" in today's accounting standards. There are significant cases of accounting irregularities that resulted in landmark changes in accounting standards. There are weaknesses in today's accounting standards and this makes it easy to manipLilate figures. Every set of financial statements presents its own unique set of "Red-Flags" in accounting crimes. There is a need to knov.' how to review financial reports. identify signals of creative accounting and to equip investors and depositors so as not to loose their investment

Capital Market and Economic Development in Nigeria

This paper empirically shows the link between capital market and economic development. The study covers a period of 32 years (1970-?pgj) using two different regressions. The first regression covers the period 1970-1985: a period before Structural Adjustment Programme (SAP), and the second regression covers the period 1986-2001: a period after SAP. Ordinary Least Squares Estimation technique is used in analyzing the data. In our study we observe that stock market development significantly correlates with real gross domestic product. The paper therefore suggests that great effort is required to improve upon the efficiency of the Nigerian capital market to engender a speedy economic development

Determinants Of Creative Accounting

The resurgence of creative accounting has become an issue of concern globally. The conflicts of interest among different interest groups amongst others represent the real causes of creative accounting. This study focused on determinants of creative accounting to determine whether the identified causes such as employees and top management compensation package tied to performance, loophole in GAAP, flexibility in accounting standard, agency rating, shareholders' demand for regular dividend and improved earning, actually encourage creative accounting or that they are a product of intuition that have no empirical basis. The study made use of primary survey data sourced through the administration of questionnaires on 200 respondents using random sampling. Three hypotheses were tested using Chi square test statistic. The three null hypotheses were rejected. The researchers therefore conclude that the identified factors actually correlate with creative accounting. It is recommended amongst others that the policy makers and regulators should ensure the bridging of the gap and loopholes inherent in GAAP and accounting standards. Investing public should also be enlightened to frown at creative accounting under any guise because of its remote consequences on their investments

Stock Market, Financial Reforms and Economic Growth in Nigeria: An Empirical Analysis

The paper investigates the relationship between stock market and economic growth. It also examines the contribution of the Nigerian Stock market to the real activity before and after the introduction of financial reforms. This paper empirically shows the link between stock market and economic growth. The study covers a period of 32years (1970-2001} using two different regressions. The first regression covers the period 1970- 1985: a period before Structural Adjustment Progrmme (SAP}/ and the second regression covers the period 1986-2001: a period after SAP. The SAP period corresponds with the period when the deregulation of the financial market was in vogue in the Nigerian economy. Ordinary Least Squares Estimation technique is used in analyzing the data. In our study we observe that stock market development significantly correlates with real gross domestic product. This finding suggests tha0 policy measures that improve efficiency of the Nigerian stock market would promote economic growth

The Effect of Capital Adequacy on Banks' Performance: Evidence from Nigeria

This study estimates the effect of capital adequacy on bank earnings and profitability in Nigeria. Panel data are provided for a sample of 10 strong banks and 10 weak banks in the period 2000- 2003 with the strong banks selected on the basis of the first 20 companies listed with the highest market capitalization. With the aid of a Least Square Dummy Variable (LSDV) model, the study found that bank earnings is invariants to factors such as bank assets and bank size but highly driven by liquidity and capital adequacy. The fixed effect model showed the distinction betvveen strong and weak bank does not hold as differential intercept dummy shows that the effect of capital adequacy on bank performance is stronger for weak banks than for strong banks. The study concludes that consolidation exercise that reinforced the capital base of the banks from a minimum capital base of N2 billion to N25 billion was a step in the right direction and suggest that the need for effective regulatory framework in the management liquidity and bank capital to shore-up bank performance in Nigeri

Enrolment and Career Choices of Accounting Students in Nigerian Universities: A Gender Analysis

This study analyzed the trend of gender enrolment and factors influencing career choices of accounting students in Universities in the six-geopolitical zones in Nigeria. It examined the enrolment pattern of accounting students in thirty-six universities from 2004/5 to 2009/10. It also examined the factors influencing career choices using data collected from seven universities through questionnaires. Mann-Whitney U test was used to analyze the data. The results reveal that gap exists in the enrolment of male and female accounting students, with lower female enrolment in the Northern than the Southern zones. Factors influencing career choices of accounting students were found to be job security, job availability and high earnings. It was also discovered that females perceive accounting to be demanding, boring, and mathematical. The researchers recommended among others that Nigerian Government should formulate a comprehensive gender policy for tertiary education in favour of females in Northern Nigeria. It was also recommended that tertiary school teachers should make accounting more interesting for students by using practical and case studies methods

Stock Market Development in Nigeria: Implications on Economic Growth and Vision 2020

This study uses time series estimates in analyzing the Nigerian economy for 18 years (1986 -2003). It is observed that there is a posttive relationship between real gross domestic investment and the real GDP This relationship is not only positive but also statistically significant at 5 per cent level. A positive and significant relationship also exists between capital market activities (proxy by stock market capitalization) and the real gross domestic product. This implies there is a link between capital market and economic growth. The paper therefore suggests that great effort is required to improve upon the efficiency of the Nigerian capital market. This will culminate in speedy economic growth thereby achieving Nigeria's target of becoming one of the twenty leading economies in the world by the year 2020

CORPORATE SOCIAL RESPONSIBILITY AND FIRM PERFORMANCE: A STUDY OF LISTED FIRMS IN NIGERIA

This study investigated the Corporate Social Responsibility (CSR) disclosure practices of Nigerian quoted companies and their determinants. A checklist of 20 attributes was developed to capture the social and environmental disclosures from the annual reports of 45 companies from 8 sectors quoted on the Nigerian Stock Exchange over a two-year period (2013 to 2014). The determinants of disclosure were proxied by company size, profitability and auditor type. Company size was measured by total assets, profitability was measured by return on equity (ROE), and auditor type was measured by a dummy variable, ‘1‘ for Big 4 and ’0‘ for otherwise. The data obtained were analysed using descriptive statistics, correlation and regression. The findings revealed that, the level of CSR was 44%, made up of social disclosure (68%) and environmental disclosure (6%). Findings also revealed that CSR was influenced by company size and auditor type; but not by profitability. This paper recommends a mandatory CSR reporting framework in line with international best practice for all listed companies in Nigeri