CHAPTER ONE

1.0       INTRODUCTION

            With the deregulation of the economy and the emergence of several government regulations, the traditional role of Universal Bank as providing short term finance has undergone an economic metamorphosis resulting in the granting of license by Nigeria Stock Exchange to universal bank to participate to a greater extent or length in the capital market.

And these enhance banks to go into various capital project financing through their corporate finance unit thereby erecting more profit or revenue generation.

1.1       BACKGROUND TO THE PROBLEM

The deregulation and liberalization of the banking industry in 2004 has changed the industry landscape in many aspect, prominent among the changes are: -

-                      Decrease in the number of banks

-                      Specialization in banking industry and non-bank financial institution, discount house, finance house and micro finance.

-                      Automation in banking industry, computerization and technology enhancement.

-                      Raising of minimum paid up capital to N25 billion for both universal and Merchant banks.  

The highlighted changes among other gave N25 billion paid-up capital for a degree completion resulting in innovation and product development or service development. A number of banks had been forced to patronize the capital market to source for fund in form of capital. Thus, the current wave of development of new service product become a reaction by bankers to the consciousness aroused with respect to the treatment to be met out to customer as well as the need for sound improvement on their liquidity position and capital base.

However, the new service products are directly aimed at mobilizing deposit and revenue generated through fee based transactions which are mostly directed to corporate customers. And with the target of providing a corporate finance services to corporate body with capital project through their corporate finance unit with the aim of generation more profit or income.