Lecture: Intro 200 Anthropology History of Theory in Anthropology
89 Pages

Lecture: Intro 200 Anthropology History of Theory in Anthropology


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  • cours magistral
Lecture: Intro 200 Anthropology History of Theory in Anthropology Most anthropologists would agree that anthropology emerged as a distinct branch of scholarship around the mid 19th century, when public interest inhuman evolution and in the native peoples of the colonial empire took hold. Anthropology as an academic discipline beg a bi later with the appointment of professional anthropologists in universities, museums and government offices. In Great Britain, Edward B. Tylor, the father of anthropology, developed the first department of Anthropology at Cambridge University.
  • breakdown of groups
  • anthropology as an academic discipline beg
  • metaphysical inversion of human nature
  • anthropological theories
  • origin of the discipline
  • cultural anthropology
  • anthropology
  • social institutions
  • something as something
  • something of something
  • something about something
  • individuals



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An Evaluation of Organic growth, and Mergers and
Acquisitions as Strategic Growth options in
the Nigerian Banking Sector

Anthony Efe Jimmy
BSc., MBA.

A dissertation presented in part consideration for the degree of
MA in Corpoate Strategy & Governance.

August 2008

In response to a Central Bank of Nigeria’s policy to increase the minimum paid-up
share capital requirement of Nigerian banks from N2 billion to N25 billion in July
2004, with December 31, 2005 as deadline, more than half of the 89 banks in Nigeria
as at July 2004 were engaged in one form of merger and acquisition, some sourced for
additional capital through public offering of their share, and others a combination of
merger and acquisition and public offering. The Central Bank of Nigeria’s policy to
increase the paid-up share capital was to amongst other things to strengthen the
financial capacity and effectiveness of the Nigerian banking sector.

This dissertation evaluated organic growth, and mergers and acquisitions as strategic
growth options in the Nigerian banking sector, with a view to ascertaining which of
the growth strategies result in superior financial performance. Access Bank and
Zenith Bank were used as case studies.

Through the use of various financial ratios in analysing five years financial statements
and other relevant information on both banks from 2003 to 2007, the analysis suggests
a mixed result: Access Bank that pursued M&A witnessed a faster growth rate,
whereas Zenith Bank that pursued organic growth was able to sustain its quality
performance trends and achieved a slower growth rate during the period under review,
in line with past literatures on mergers and acquisitions, and organic growth

(ii) Table of Contents

Title page i
Abstract ii
List of tables and Figures v
Acknowledgement vii
Dedication viii

1.1 Background 1
1.2 Overview of the Nigerian Banking Sector 1
1.3 Literature Review 1
1.4 Research Methodology 1
1.5 Data Analysis and Presentation 2
1.6 Discussion and Conclusion 2

2.0 Introduction 3
2.1 Nigerian Banking sector regulatory Agencies 3
2.2 Embryonic phase of Nigerian Banking 5
2.3 The expansion phase of Nigerian Banking 6
2.4 Consolidation/reform phase 8
2.4 Post-consolidation 12

3.0 Introduction 14
3.1 Organic (Internal) Growth 14
3.1.1 Benefits of Organic (Internal) Growth 15
3.1.2 Limitations of Organic (Internal) Growth 15
3.2 Merger and Acquisition defined 16
3.3 Mergers and Acquisitions research paradigms 17
3.4 Types of Mergers and Acquisitions 18
3.5 Stages of Mergers and Acquisitions 20
3.6 Merger and Acquisitions wave 23
3.7 Merger and Acquisitions activities in the Nigerian Banking sector 25
3.8 Legal hurdles for M&A in Nigerian Banking sector 27
3.9 Reasons for Mergers and Acquisitions 27
3.10 Limitations of Merger and Acquisitions 29
3.11 Effects of Merger and Acquisitions on bank performance 30
3.12 Summary 30

4.0 Introduction 32
4.1 Research purpose 32
4.2 Research approach 32
4.3 Type of research 32
4.4 Case studies selection criteria 33
4.5 Data collection and analysis procedure 33
4.6 Limitations 36
4.7 Summary 36

5.1 Introduction 37
5.2 An overview of the case studies 37
5.3 Findings 42
5.3.1 Liquidity 42
5.3.2 Profitability 44
5.3.3 Capital Adequacy 48
5.3.4 Asset Quality 50
5.3.5 Growth rate 52
5.3.6 Investment Valuation ratios 58
5.3.7 Share price movement 59
5.3.8 Actual versus projected performance of Access Bank 61



List of Tables and Figures

Table 2.1 List of banks in Nigeria as at January 1, 2006 11
Table 2.2 Basic indicators of Banking sector consolidation results 12
Table 3.1 Summary of major M&A waves in the US 24
Table 3.2 Bank M&A in Nigeria between 2004 and 2005 26
Table 3.3 Reasons for merger and acquisitions 28
Table 5.1 Summary of Access Bank’s 5 Years Profit & Loss Account 39
Table 5.2 Highlights of Access Bank’s 5 Years Balance Sheet 39
Table 5.3 Summary of Zenith Bank’s 5 Years Profit & Loss Account 41
Table 5.4 Highlights of Zenith Bank’s 5 Years Balance Sheet 41
Table 5.5 Loan: Deposit Ratios 43
Table 5.6 Return on Assets 45
Table 5.7 Net Interest Income: Total Asset Margin 47
Table 5.8 Cost: Income Ratio 47
Table 5.9 Equity to Asset Ratio 49
Table 5.10 Equity to Loans Ratio 50
Table 5.11 Provision for Loan Losses to Total loans 51
Table 5.12 Provision for Loan Losses to Profit before Tax 52
Table 5.13 Profit before Tax growth rate 54
Table 5.14 Deposits growth rate 55
Table 5.15 Shareholders’ Equity growth rate 56
Table 5.16 Total Assets plus Contingencies 57
Table 5.17 Dividends Payout Ratios 58
Table 5.18 Profit and Loss Accounts (highlight of forecast and actual) 62
Table 5.19 Balance Sheet highlights (forecast and actual) 62
Table 6.1 Growth rate between 2005 and 2007 64
Table 6.2 Access Bank’s 2008 performance highlights 65
Table 6.3 Zenith Bank's 2008 3Q Operation Statement 65
Figure 5.1 Cash & Short-term Investment to Current Liabilities 43
Figure 5.2 Returns on Assets 45
Figure 5.3 Returns on Equity 46
(v) Figure 5.4 Returns on Capital Employed 46
Figure 5.5 Cost: Income ratio 48
Figure 5.6 Equity: Total Assets 49
Figure 5.7 Provisions for Loan Losses to Total loans 51
Figure 5.8 Provisions for Loan Losses to Profit before Tax 52
Figure 5.9 Gross Earnings growth rate 53
Figure 5.10 Deposit growth rate 55
Figure 5.11 Shareholders’ Equity growth rate 56
Figure 5.12 Total Assets plus Contingencies 57
Figure 5.13 Growth in Earnings per Share 58
Figure 5.14 Share price movement pre Access Bank merger 60
Figure 5.15 Share price movement during merger 60
Figure 5.16 Share price movement post Access Bank merger 61

I will like to express my profound gratitude to my supervisors, Kevin Amess (PhD), for
his insightful professional guidance, valuable suggestions, patience, and attention.
My sincere gratitude also goes to the following individuals and others too many to
mention, who in no small way contributed to the success of this research and Masters
programme: Professor Bob Berry, Professor Andy Lockett, Professor Dave Wastell,
Professor John Hasseldine, Rodion Skovoroda (PhD), and Qi Xu (PhD). Mr Emma
Egbabor, Felix Soh Chick, Kim Jungmo, Gino Miller, Hung Lin, Xu Ma, Kayode Ajani,
Godwin Emefiele, Udom Emmanuel, Gideon Jarikre, Stanley Amuchie, Biodun
Durosinmi, Alex Tobi, Tajudeen Ahmed, Nnamdi Owoh, Dokun Faniran, Okezi Orioko,
Godwin O’Fidel Ogbepia, Baba Sege Okunnade, John Chijindu Onuoha, Zek
Enamegwono Bazunu, Josephine Bazunu, Ofurio Moses, Andy and Ajiri Evanwawerae,
Fovie Jude & family, Mr & Mrs Bode Betiku, Mr & Mrs Patrick Atamu, Virtue
Omolamai & family, Jacob Ogbekene & family, Billy & Priya Johal, Ted-Mukoro Oboh
Esq. & family, Martins Emozino Edoja Esq. & family, Jimmy Solomon, Gladys Jimmy,
Obruthe Jimmy, Edwin Jimmy, Abigael and Reuben Jimmy. Also Engr. T.K. Elelewor,
Sam Elelewor and family, Rev. Paul Omasere & family, Israel Omasere & family,
Sunday Onaimor & family, Adueniwomah Williams & family, Sunday Ojaigho & family,
Felix Uchenunu & family, and Simon Uchenunu & family. And most especially to Mrs
Doreen Onome Uchenunu, and Ambrose Oroboh Uchenunu (Ph.D), who were very
inspirational to my choice of and exceptionally comfortable stay during my studies in the
University of Nottingham.


my parents – Freeborn A. Jimmy and Martha Ada Jimmy; and
my friend/wife (Jimmy Rita), and our children: Zino, Maro and Karo.

(viii) Chapter 1: Introduction

1.1 Background
Following the 18 months ultimatum given by the Central Bank of Nigeria on July
2004 to all deposit taking banks in Nigeria to increase their paid-up share capital to a
minimum of N25 billion with a deadline of December 31, 2005, most banks resorted
to mergers and acquisition while a few to organic growth to achieve the feat. This
directive led to an unprecedented number of mergers among Nigerian banks within
the spate of eighteen months, between July 2004 and December 2005.

This study seeks to evaluate organic growth, and mergers and acquisition as strategic
growth options in the Nigerian banking sector, with a view to ascertaining which of
the strategies result in superior financial performance. To achieve the purpose of this
study, two banks: Access Bank Plc that was involved in a merger during the
consolidation of 2004 and 2005; and Zenith Bank Plc that achieved the N25 billion
requirement through organic growth, are used as case study.

1.2 Overview of the Nigerian banking sector
Chapter two of this study gives a general overview of the Nigerian banking sector. It
dwelt briefly on banking regulation and regulatory authorities in Nigeria, and a
thsynopsis of banking history in Nigeria from its embryonic phase in the late 19
century to events leading to the spate of mergers and acquisitions witnessed in Nigeria
between July 2004 and December 2005.

1.3 Literature –Review
Chapter three is a review of scholarly academic literatures and analytical views on
merger and acquisition. It focused on the organic growth, meaning and types of
mergers and acquisitions, different paradigms to the study of mergers and acquisitions,
and mergers and acquisitions in the Nigerian banking sector.

1.4 Research Methodology:
Chapter four is a discussion of research methodology used in the study. The study
used qualitative research approach from the economic/finance and strategy
perspectives of M&A, relying on simple statistical tools and methods to analytically
-1- review financial performance, market valuation, and market share – pre and post
M&A period of the selected case studies. Qualitative approach was chosen for this
study, because it is the most suitable means of research that can lead to a better
understanding and evaluation of the financial performance of the case studies.

1.5 Data Analysis and Presentation
This part of the study gives an analysis and presentation of findings on the case
studies. Access Bank and Zenith Bank’s financial statements for the period 2003 to
2007 were analysed using a procedural approach of liquidity, profitability, capital
adequacy, asset quality, growth rate, and stock price movement.

1.6 Discussion and Conclusion:
I do believe the outcome of this research would be instrumental in inspiring other
empirical studies in the future on the Nigerian banking sector.