This research work was designed to examine survival strategies in the treasury management in the face of global credit crunch.  As a prerequisite toward the accomplishment of this research work, questionnaires were administered to the management and staff of the banks under study.  The data collected from the questionnaires were analyzed using percentage analysis and hypotheses were tested using chi-square statistical technique.  From the analysis of the data collected, the followings findings were made.  Significant relationship exists between treasury position of commercial banks and their profitability.  Global credit crunch has an impact on treasury management of commercial banks in Nigeria.


In summary, treasury management comprises fund acquisition and enables banks to mandate its risk and thereby helped to sustain public confidence in the operation of the banking institution which in turn leads to move patronage and consequently more profit.  Base on these findings, the following recommendation were also made.  Banks must always ensure it meet up with the statutory legal requirement within the permissible ranges.  C.B.N should ensure bank meet up with the statutory legal reserve requirement within the permissible ranges.  Failure to do this exposes the bank to penalties which are assessed on shortfalls by the regulatory.

Title page

Approval page




Table of contents



1.0 Introduction

1.1 Background of the study

1.2 Statement of the problems

1.3 Objectives of the study

1.4 Research Question

1.5 Statement of the study

1.6 Significance of the study

1.7 Scope of the study

1.8 Limitation of the study

1.9 Definition of terms


2.0 Literature review

2.1 Introduction

2.2 Background of the Global credit Crunch

2.3 defined and causes of Credit Crunch

2.4 Role of treasury management in global

2.5 Techniques for Treasury management

2.6 How credit crunch occurs and its impact on the Nigerian economy

2.7 risks associated with the various techniques for treasury management

2.8 solutions possible global credit crunch

2.9 Comparative analysis between first bank and intercontinental Bank Nig Plc


3.0 research design and methodology

3.1 Introduction

3.2 Research design

3.3 Sources and methods of data collection

3.4 Population and sample size

3.5 Sample technique

2.6 Validity and reliability of measuring instrument

2.7 Method of data analysis


4.0 Presentation and analysis of data

4.1 Introduction

4.2 Presentation of data

4.3 Analysis of data

4.4 Test of hypothesis

4.5 Interpretation of result



5.0 Summary Conclusion and recommendation

5.1 Introduction

5.2 Summary of finding

5.3 Conclusion

5.4 Recommendation






Chapter one

  • introduction
    • Background of the study

one issue that has become worrisome and of much concern in the banking industry is the issue of treasury management.  It is note worthy that between 1929 and 1959, as many as twenty seven indigenous banks were registered in Nigeria by at the turn of independence in 1960, daily four of them stayed a float.


The Babangida administration deregulation program let to astronomical increase in the number of banks and other financial institution operating in the country.  By 1994 there were a total of 129 banks operating in the country


Out of the number  only about 20% were in good health.  The remaining 80% want either distressed or terminally ailing resulting in the liquidation of many of them.  Fallout from heightening of competition in the industry forcing many banks to adopt consolidates their existence.


In the banking system a good bank manager anywhere, anytime will tell you that three most important words in his business dictionary are profitability, liquidity and solvency.  It must be said form the outset that none of the above is optional.  The three goals must be pursed and achieved virtually in very small and big transaction of the bank.  Day by day,  month, and year by year.


They are universal need of banks,. In the 2001 the total number of banks operating the country as at presents lose to ninety-one (91), following the issuance of (3) new banking license to institution, which have commence operation.  Three (3) banks were granted approvals in the principles, while many more application for banks licenses were at various stages of the approval process.  Source:  C.B. Broun (1925).


  • statement of problem
  • treasury is considered as sine-qua-non in the successful operation of a bank. Therefore, any ineffectiveness in its management constitutes a big problem.  This problem is the therefore analyzed as the basis for this research study.


They analysis commenced from the eras of banking inception of Nigeria, through its growth stages and till what it is today.


The initial bank failure recorded were principally due to inefficiencies in the management of such banks which one way or the other has something to do with either treasury needs or the relative inefficiency in its management.  As an institutional problem, it has persisted over age in determine the survival or otherwise of banks.


Although it must be said that some relative degrees of banks failure is inevitable given the nature of banking.  It is believed that any banking institution that is properly managed and has adequate liquidity should be able to swim above troubled waters.   Problesm some tiems also evolve from banks inordinate urge to make phenomenal profit.


In the process of doing this, there is tendency for these bank to get careless in there’re resources utilization and particularly their management.


The resultant effect is usually loss substance and consequently loss accumulation, a situation that can lead to bank failure.  An important factors is that national government of all time treasury management preoccupy themselves with the fixing of a ratio holding by banks.


This show the degree of importance attached to treasury and its management by these governments.  Any deviation from this ratio or inadequacy of its management always spells trouble for the bank concerned.


The far – reaching consequences of inadequate treasury management can also be examine.


Apart from profits declines, other attendant consequences to a bank include loss of confidence in the particular bank, its inability to fulfill both its short-terms and long-term obligations, lack of trust on the part of depositors and other customers alike and the concomitant reduction of levels of operation.  An event worth mentioning was the suspension of some banks from the foreign exchange market for 12 months, following the investigation carried out by the apex institution.  The institution participated a crisis of confidence resulting in the bank withdrawal of fund from bank speculated to be distressed and putting in the healthiest and safer banks.  A recent examples was savannah bank plc and other financial  institution which as an accumulation, as gone into extinction or is on the brink of collapsing.


The analysis of the problem which is carried our with a view to this study.  Other effects of the problem as well as their consequences would be unfolded as the study progress.


  • objective of the study
  1. The basic aim of the study are to determine how effective banks would manage their treasury
  2. To examine the relationship, quality of bank profit and the degree to which they have been above their management.
  • To examine how these banks are above to adjust their treasury needs and control management in Nigeria.

Whatever hypothesis scenario this report, reasonable basis to make recommendation based on the findings of the study.


  • Research question
  1. Is there any benchmark to examine the relationship quality of bank profit and her degree of treasury management.
  2. How is these banks able to adjust their level of fund acquisition and control management in Nigeria.
  • How can these banks effectively manage their treasury needs in the face of global credit crunch.
  1. How can treasury of banks be measured
  2. Is there any limit bank can keep their cash holding in Nigeria
  3. What strategies can banks adopt to maintain their treasury management.


  • significance of the study
  1. The importance of treasury management to bank in particular and to the economy in general, has since been recognized by successive government in Nigeria.
  2. Banks need treasury management to remain solvent, meet legal requirement, take care of seasonal and unexpected project opportunities, and meet unforeseen emergencies.
  3. Banks that are asked to reasonably management their treasury always make good profit and also maintain the quality of such project. The all pervading influence of treasury in both banking and other financial institutions cannot be over emphasized.
  4. It just be known however, that complying with government statutory regulation in maintenance of treasury profit, always to adequately manage their treasury which always reflects in pool profitability positions for such banks.


  • scope of the study

due to time and resources constraints, the study art hand has been limited it first bank plc and intercontinental bank plc (the statutory reports, statistical report and relevant data.


  • Limitation Of The Study
  1. Limitation of this study as faced by the researcher emanated primarily from inadequate attention given to the researcher by the banks staff due to their schedule, time and factor.
  2. Another limitation of this study as faced by the researcher is inadequate information given the researcher by the bank staff. This is caused by inadequate training by the bank staff and lack of knowledge.
  3. unavailability of finance to visit other banks apart from those one in your case study
  4. unavailability of time


  • definition of terms
  1. Treasury: Treasury can be described as emerged as a result of the sophistication of banks.  Indeed treasury function is a critical tool for controlling liquidity.  Interest rate and off-balance sheet risk, loans, deposits, borrowed fund pricing and the execution of assets and liability management policies.
  2. Treasury management: Comprises fund acquisition, investment in marketable securities, hedging and the management of the bank reserve account at the central bank
  3. Credit: Credit refers to being worthy of trust with other people money or have the ability to obtain a loan when necessary. Credit arises when someone who ahs ready purchasing power lends it to a borrower in exchange for an I.O.U. typically an interest bearing promise to pay over the term of loan, and time period in which the credit is outstanding.
  4. Credit crunch: A credit crunch is an economic condition in which investment capital is difficult to obtain.  Backs and investors become wary of lending funds to corporation thereby driving up the price of debt product of borrowers.  This also applies for industrial borrower and banks become more risk averse and try to optimize their loans portfolio. Central banks try to counter this risk aversion by lowering lending interest rates in order to keep money markets a float.
  5. Globalize: From the world globe one derived globalize as it is used in thinks research entails that the credit crunch in other words known as financial crises exist in the whole nation.
  6. Term loan – A term loan is defined as a consumer and industrial loan with an original maturity of more than one year. Or a loan granted under a formal agreement, revolving credit or stand-by on which the original maturity of the commitment was in excess of one year.  Real estate mortgage as term loans even though they have a relatively long maturity.
  7. Cash flow: when viewing liquidity from the cash flow concept approaches are considered  not only the ability to convert liquid assets but also the ability of the economic unit to borrow and to generate cash form operation.
  8. Profitability ratio: This ratio give the firms profitability in relation to some investment base or to net sales.  They attempt to measure the overall operational efficiency of the firms management.
  9. Treasury bill: the treasury bill which are short term sources of funds for the federal government were introduced under the 1959 treasury bill ordinance in Nigeria, they were responsible for bridging the gap between the  time federal government gets her actual expenditure.
  10. Lost: where the items is outstanding for 360 days or more and are not secured by legal title to leased assets or perfected realizable collateral in the course that are non-performing.
  11. Bond/debentures: A debenture or bond is a written acknowledgement of a debt owned by a company executed under the common seal of the company.  Debentures or bonds represent loan capital.  They may be issued by companies or government or government bodies for the purpose of raising finance over  specific period of time for example 5, 10, 15 years) debentures or bond can be issued at per, a premium or at a discount.
  12. Demand deposit: These deposits are by nature non-interest bearing as they are volatile and usually withdrawn on demand.  Whatever the situation I, demand deposit are generally banks lowest cost source of funding. Cheque are drawn and paid on demand deport account and commission is earned by a bank based on the account turnover.
  13. Bank: Bank is an establishment for keeping money and valuables safely, the money being paid out on the customers order.  It is also where finance and other financial services are obtained.
  14. Lending: Lending in finance implies extending credit to an individuals, group of individuals or organization against stipulated terms and conditions.  Whether bank lending is made to a private person, corporate organization or to economic institutions, the purpose is to enhance the development of the economy.
  15. Money: Money is the easiest and most convenient means of storing surplus goods or wealth for further use.  People do not consume all their wealth or output and so some have to put aside for future use.  This money put aside is usually kept in the bank or any financial institution at a price.  One also serves as a standard of deferred payment because goods and services can be bought on credit and payment made at a later data.
  16. Investment: Investment is that part of person, income that is neither, consumed nor saved investment acts as a cashier between liquid assets and loans and as such they can be made liquid to augment liquidity in time of trouble or converted into cash to increase loans and advances.
  17. Cash management: Cash is sterile as it does not yield income.  Holding of excess cash or insufficient cash usually impacts negatively on the profitability of a bank.  Cash management is therefore concerned with the process of ensuring that cash is held to minimum while any excess is invested in short term money market instruments to earn income.  In other words, a bank should strive to manage its cash balance efficiently.
  18. Trade-off: This refers to balance between two opposition concepts.  The use of trade-off in this research entails the balance between bank liquidity and profitability in order to sustain in the global financial crisis facing all the banks in Nigeria.
  19. Value cash: This consists of money that the bank holds to meet its daily transaction needs.  When a bank has more vault cash than it needs, it deposit the excess with the centre bank.  If the bank’s vault cash is less than needed, then cash is withdrawn from the central bank to cover the shortfall.
  20. Risk: A situation is risky when a complete list of all possible outcomes and the associated chance of their occurrence are known in advance.  The decision process under risk involves both the measurement of and attitude towards risk.  Risk can also be defined further as the possibility of a loss.