BANK DISTRESS AND BANKING HABIT IN DELTA-STATE:
A CASE STUDY OF UGHELLI-SOUTH LOCAL GOVERNMENT AREA
 ABSTRACT
       The purpose of this study was to ascertain the bank distress and banking habit of people in Ughelli south local government area. Seven banks were used for the study. Questionnaires containing 18 items was administered. The main areas of the questionnaire relate to: loss of confidence, reduction of saving, unwillingness to patronize Nigerian banks, formation of negative opinion about banks, device alternative method of saving their money.
       Hence simple percentage method is the main statistical techniques applied in the analysis of data collected. After the analysis of data and the testing of hypothesis generated in the study, it was discovered the loss of confidence, reduction of saving and formation of negative opinion about banks, can be the consequence of bank distress and banking habit of people in Ughelli south local government areas.
       Consequence, it was recommended that, reconstruction of banks management with matured, experienced and qualified people, owners to be quite distinct from the banks, also recapitalization of the capital lease of the banks, prosecution of unscrupulous customers to curb other people from defrauding the banks. Furthermore, employment of qualified staff to the service of the banks and financial assistance by the central bank.
TABLE OF CONTENT
CHAPTER ONE   
Introduction
1.1       Background of study
1.2       Purpose of the study
1.3       Statement of the problems
1.4       Research question
1.5       Specific objectives
1.6       Hypothesis
1.7       Significance of the study
1.8       Scope of the study
1.9       Limitation of the study
CHAPTER TWO   
Literature review
2.1       The history of bank in Ughelli-south LGA
2.2       Functions of bank
2.3       The role of banks in Economics Development of Nigeria
2.4       Problems of banking in Nigeria
2.5       Concept and nature of distress
2.6       How to determine and access bank distress.
CHAPTER THREE
Methodology
3.1       Research methodology
3.2       Population
3.3       Sample
3.4       Development of instrument
3.5       Method of data collection
3.6       Method of data analysis
CHAPTER FOUR
Presentation and analysis of data
4.1       Data analysis        
CHAPTER FIVE   
Summary of findings, conclusion and recommendations
5.1       Summary
5.2       Conclusion
5.3       Recommendations
5.4       Implication of this study
REFERENCES    
APPENDIX        
CHAPTER ONE
INTRODUCTION
1.1     BACKGROUND OF THE STUDY
The place of bank in the life of any nation cannot be over emphasized for instant, commercial bank started in Nigeria sometimes in 1891, the early generation banks contributed tremendously towards the economic development of the country. However, with the advent of second and third generation banks, there were sign of distress. Indeed distress in banks became a big source of concern of the entire financial system even though the scale was generally midst until 1989. Before this time, serious incidents of distress were relatively few and generally amendable to control by the monetary authorities. In the banking industry for example, the number of banks adjusted technically distressed rose steadily from 8 in 1990 to 42 in 1994 and 51 by the end of 1995 etc. As a result of the central position of banks in the financial sector, it would be safe to assume that issues as the relate to banks is to a large extent, effectively of the financial industry.
The banks in financial distress between 1994 to 1999 accounted for about N16.7 billion or 10.3 percent of the deposit liabilities of the banking system and N15.6 billion or 15 percent of the systems outstanding loans and advances. More than two thirds of the aggregate loans of such banks were non-performing while their aggregate adjusted capital stood at N4.7 billion. The extent of distress in the primary mortgage institution, community banks and financial companies is not different from that of the conventional banks invariably, a good number of these institutions have been closed down while cases of breach of contractual obligation to depositors abound. Therefore, this study aimed at identifying the banks distress and banking habit of potential customers using the situation in Ughelli south Local Government Delta State.    
1.2     PURPOSE OF THE STUDY
This project work intends to know the meaning of banks distress and banking habit consequently, the purpose of this study was to determine the effect of banks distress and banking habit of Ughelli south people.
1.3     STATEMENT OF THE PROBLEMS
The problem of the study relate to find out the effect of banks distress and banking habit of Ughelli south local government area. In the late 1990s and early part of the 2000, the country suffered greatly from a stagnated and crumbling economy. The banking sector which forms a part of the nations economy was adversely affected to the extend that, its effectiveness or efficiency became questionable as many banks went into liquidation and folded up. During this period, the country witnessed a trend of “failed banks”.
       Many other economic issues contributed in this aspect, there was high level of inflation in the economy due to ever increasing prices of goods and service in the market, this in the long run affects savings. Since the banking sector deals mainly with money, for some time now, the value of the naira has fallen in the international market. This devaluation of the nations currency has generally affected monetary transactions. Apart from these, the issue of high rate of unemployment and poor standard of living have reduced the purchasing power of the people. That is why income per capital is low in the country. This again is reflected in the people’s savings capacity.
       In addition to these problems, there was also an instruction from the apex bank governor Prof. Charles Soludo in continuation to the economic reform programmes of the present democratic dispensation to define a particular shareholders fun to be met by the 89 commercial banks in Nigeria in which case December 2005 was given as an ultimatum or deadline to meet up with the N25 billion naira capitalization fund. But only 25 banks out of the 89 banks in the country met this requirement while the remaining became distressed or folded up.           
1.4     RESEARCH QUESTION
The following research question were generated in this study:
1.          Does banks distress discourage customers from patronizing banks?
2.          Does banks distress make customers to loss confident in Nigeria banks?
3.          Does banks distress lead to reduction in the amount being deposited by customers?
4.          Does banks distress make customers to device alternative methods of savings their money?
5.          Does banks distress make customers to form negative opinion about banks in general?
1.5     SPECIFIC OBJECTIVE  
The following specific objectives were achieved in this study:
1.          To find out whether distress in banks discourage customers from patronizing banks
2.          To ascertain whether distress in banks lead to the reduction in the amount being deposited by customers
3.          To find out whether distress in banks make customers to lose confidence in Nigeria banks.
4.          To find out whether distress in banks made customers to device alternative method of saving their monies.
5.          To ascertain whether distress in banks make customers to form negative opinion about banks in general.   
1.6     HYPOTHESIS
The following hypotheses were tested in this study.
1.          Distress in banks does not significantly discourage customers from patronizing banks.
2.          Distress in banks does not significantly lead to the reduction I the amount being deposited by customers.
3.          Distress in banks does not significantly make customers to device alternative method of saving their money.
4.          Distress in banks does not significantly make customers to form negative opinion about banks in general.
5.          Distress in bank does not significantly make customers to loose confidence in Nigeria banks.   
1.7     SIGNIFICANCE OF THE STUDY
This study in that:  
1.          The study will allow government and people in general to know more about the bank distress and banking habit.
2.          The study will serve as a key or forum for manager’s on how to improve the technical on banking habit.
3.          In addition, the study will serve as a precedent for other people who may wish to make a research on the banks distress and banking habit of Ughelli south people.
1.8     SCOPE OF THE STUDY
The study is designed primarily to ascertain the bank distress and banking habit of people in Ughelli south local government area. In doing this, the researchers limited themselves to finding out whether bank distress lead to:
Discouragement, I loss of confidence, reduction of deposit, alternative method of saving money and negative opinion on the part of customers.