CHAPTER ONE

1.1 INTRODUCTIONThe research work is about the financial distress in the banking industries, causes, implications, and possible solutions. Bank distress occurs when a bank or some bank in the system experience liquidity or insolvency resulting in a situation were depositors fear the loss of their deposits and a consequent breakdown of contractual obligation. While a bank is said to be liquid when it cannot met up with its liability as when they are matured for payment. It is said be insolvent when the value of its realizable asset is less than the total value of its liabilities (“ a case of negative network “). The cold lead to an overall ruin as the depositor’s loss their confidence in the system and avoid capital loss.

In a different human perspective, bank distress means a different thing. To some people, bank distress exists only when the bank in question ceases to operate even if it has not been officially liquidated. In a wilder contend, a bank is said to officially distress if it has failed in archiving and of the objective for which it was established. The objective of this project among others is to access financial distress in the banking industry, with a view to identify their forms, cause and implication and the possible solution to them.