ABSTRACT
The success or failure and
effectiveness or ineffectiveness of any banking or financial sector depends on
extent of customer’s patronage and the financial resources available to form
and procure the required service oriented facilities. In Nigeria, there are
lots of problems associated with banking. The problems include in adequate
financial capacity, that is weak capital base, lack of sound technical
planning, bad implementation of formulated policies linking the banking
operations, inadequate supervision and monitoring of economic changes and large
scale financial embezzlement. Due to these problems, many financial firms are
distressed and subsequently are closed up. The study therefore examined the
cash deposits pattern of commercial banks for the past 10 years with fidelity
bank Plc, Owerri as a case study. Data used for this technical research were obtained
from secondary source these data were out-puts of cash deposits of customers
patronizing fidelity bank plc Owerri from 1998-2007. The data was
systematically analyzed using time series models. The study found that there is
an annual decrease in the rate of cash deposit patterns in fidelity bank plc
Owerri as a study unit of commercial banks. Finally, the study suggested some
solutions and also made some fine and worthy recommendations.
CHAPTER
ONE
1.0
INTRODUCTION
The need to monitor, evaluate and
make adequate plans for the future compels managers, scientist of various
calling and researchers alike to collect data on regular basis on processes
that vary as time passes. Observations on such processes when arranged in
chronological order (in time sequence) are called time series. A time series is
a group of data that has been collected successively over a period of time.
Some examples of time series are: the daily cash-deposits of customers, the
weekly recorded cash-deposits of the bank, and the weekly or monthly stock
levels of a company, the number of patients treated by a particular hospital
per annum.
The method of analyzing and
interpreting these data is referred to as time series analysis. Time series
analysis is very important in business and economic for forecasting purposes.
As we tend to base our forecast of
cash-deposit results on what has happened in the past. The statistical series
which tells us how data has been behaving in the past is the time series. It
gives us the values of variable we are considering at various points in time
each year for the last ten years. Time series may be classified as follows:
SECULAR TREND: This is refers to the
general direction in which the figures appears to the going over a long
interval of time. It is important to distinguish between trends resulting from
cyclical influence on the economy. Example, a change in task of customers
buying habits. The observation of a secular trend might show an upward trend or
downward trend or a steady trend.
SEASONAL VARIATIONS: It is a common
knowledge and a clear view to all that the value of many variables depends
partly on the time of the year in question, every one knows that the rate of
cash-deposits of customers is usually high in the month of March to November,
during which customers stock their cash in banks, that is in order of months.
CYCLICAL VARIATION: As the economy
expands during the period of boom, we would expect to find that such data like
cash-deposits, cash withdrawals or customers expenditure and sells rate will
show a rising trend, and during the period of slump, we would expect them to
show downward trend. Thus a wave-like motion may be observed in the pattern of
our data.
IRREGULAR VARIATION: These are random
external events which affects our variables. May are also referred to as random
variations because they result from sporadic events such as strikes,
earth-quakes, floods, fire disaster, riots and this events are unpredictable.
It is very clear that time series
analysis will help in finding the trend to guide this industry or sector in
forecasting and other management decisions that pertain to competition. In
order to create a conducive condition or climate favourable for business,
sponsoring the national football league and all national volley ball league or
basket ball league is just a few. Their management slogan is “We keep our
word”.
1.1
STATEMENT OF THE PROBLEM
Cash-deposits and withdrawals are the
main determinant of banks financial status. In a highly competitive industry
like the banking sector, this issue posses some serious challenges and
responsibilities to baking sector which also the fidelity bank plc Owerri is a
victim.
What is their recorded cash-deposit
level and level of financial base? Do these records not measure up to the
standard that merited them their position in the financial or banking sector?
Analysis made on the cash-deposits transactions are only information services,
and as such must be conditioned by the process to which they are applied unless
that may only lead to false sense in the industries. It is in the light of
these questions that I wish to carry out this research.
1.2
PURPOSE OF THE STUDY
The purpose of the study is due to
the growing need to monitor the performance of an economy. Time series analysis
is used to determine, the trend of deposit which might be use to forecast or
predict future results.
Managers and governments need an
understanding of the past and current pattern of change in the cash-deposit
rates and provide clues about future patterns to aid in forecasting.
This study is initiated out of the
desire to provide to those who may need it, as a basis for forecasting and
decision making, which are tools for economy growth and standardization.
1.3
STATEMENT OF HYPOTHESIS
A study of this nature of phenomena
will require stating some hypothesis.
Hypothesis is a statement which
stands to be opposed or supported depending on the outcome of the result of the
analysis.
H0:
There is no significant difference on cash-deposits for the past ten
years.
H1:
There is significant difference
on cash-deposits for the past ten years.
H0:
There is no growth in the cash-deposits rate.
H1:
There is growth in the cash-deposits rate.
Ho:
There is no significant change on the cash deposit output rate in time
series data.
H1:
There is significant change on the cash deposit output rate in time
series data.
1.4
SCOPE OF THE STUDY
This study is limited to the
cash-deposits made at fidelity bank Plc, Owerri and it covers a period of ten
(10) years from 1998 to 2007.
1.5
LIMITATIONS OF THE STUDY
The financial or banking sector has
been characterized by strict and uncompromising competition and rivalry. Due to
this, basic information relating to cash-deposits and withdrawal are always
treated in strict confidence. This is one of the set backs or problems
encountered in the course of the data collection from the sector.
Management uneasy compliance to
release the authentic data for the fear of other sister industries having
knowledge of their financial performance and level of their been patronized by
customers since they are in a competitive environment, contributed a
hydra-headed limitation to this research.
1.6
SIGNIFICANCE OF THE STUDY
The significance of this great effort
is to examine the rate of cash-deposits in the Fidelity Bank Plc, Owerri, it is
very relevant to both management and staff of the company. It is believed that
it will help management and staff to plan effectively for desirable change and
improvement geared towards accessing and revealing the strength and weakness of
the cash-deposits segment of fidelity Bank Plc, Owerri.
1.7 OBJECTIVE OF THE STUDY
To examine the cash-deposits pattern
of fidelity bank, which forms the basis for its growth?
To determine the trend of its
cash-deposits rate and use it to forecast future estimates.
To deseasonalize the data on
cash-deposits recorded from 1998-2007.
To offer suggestions and remedies for
improvement on banking.
1.8
DEFINITION OF TERMS
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