Bank asset allocation after financial crisis
Dedication
To my family, especially my mom and dad, Julieth and Phillip
I love you all. I am proud to be part of you. May God richly bless us and multiply the fruits of our hard work and tenacity. It’s neither by might nor by power, but by my spirit, says the Lord!
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Acknowledgements
I wish to express my utmost gratitude to my supervisor, Mr. K. O Apreku for tirelessly working with me in carrying out this research. His inspiration, support, and guidance went a long way in making this project the great success that it is. My sincere appreciation also goes to Memory Changachirere for providing me with invaluable research assistance in terms of both ideas and resources. I also thank my sister, Mrs. R.
Mhizha for helping me with research materials when I needed them most. Special gratitude goes to a special friend, Fadzai Chitsa for the inspiration she gave me during the writing of this project. I am also grateful to my brother Lackson and his family for their encouragement. I am especially indebted to my parents for the support they provided throughout the period of my studies. I am heavily indebted to all my friends and the bank managers who took part in the survey that formed part of this project for their invaluable contributions. I can never be thankful enough to the Almighty for my life and all the blessings, love, care, protection, guidance, inspiration, and good health. God, I will hold onto the promises!
ii
Abstract
As the financial sector recovers from the turbulence of the 2003-2004 financial crisis, commercial banks are confronted with a major dilemma emanating from the inherent conflict between profitability and liquidity in all forms of financial intermediation. This dilemma arises from the need to extend credit to the real economy, and hence earn higher returns on shareholder funds and the need to maintain a low credit and liquidity risk profile, to safeguard depositor funds. The main objective of the study is to
To my family, especially my mom and dad, Julieth and Phillip
I love you all. I am proud to be part of you. May God richly bless us and multiply the fruits of our hard work and tenacity. It’s neither by might nor by power, but by my spirit, says the Lord!
i
Acknowledgements
I wish to express my utmost gratitude to my supervisor, Mr. K. O Apreku for tirelessly working with me in carrying out this research. His inspiration, support, and guidance went a long way in making this project the great success that it is. My sincere appreciation also goes to Memory Changachirere for providing me with invaluable research assistance in terms of both ideas and resources. I also thank my sister, Mrs. R.
Mhizha for helping me with research materials when I needed them most. Special gratitude goes to a special friend, Fadzai Chitsa for the inspiration she gave me during the writing of this project. I am also grateful to my brother Lackson and his family for their encouragement. I am especially indebted to my parents for the support they provided throughout the period of my studies. I am heavily indebted to all my friends and the bank managers who took part in the survey that formed part of this project for their invaluable contributions. I can never be thankful enough to the Almighty for my life and all the blessings, love, care, protection, guidance, inspiration, and good health. God, I will hold onto the promises!
ii
Abstract
As the financial sector recovers from the turbulence of the 2003-2004 financial crisis, commercial banks are confronted with a major dilemma emanating from the inherent conflict between profitability and liquidity in all forms of financial intermediation. This dilemma arises from the need to extend credit to the real economy, and hence earn higher returns on shareholder funds and the need to maintain a low credit and liquidity risk profile, to safeguard depositor funds. The main objective of the study is to
References: Comptroller of the Currency, 2001, Comptroller’s Handbook on Liquidity and Funds management, USA Dudley G. Luckett, 1984, Money and Banking, 3rd Edition, McGraw Hill Inc, Singapore Edward W New Jersey G.O.Nwanko, 1990,Prudential Regulation of Nigerian Banking, University of Lagos Press, Akoka Gary Smith, 1991, Money, Banking & Financial Intermediation, D.C managing Financial Services, 5th Edition, Richard D. Irwin Inc Reserve Bank of Zimbabwe, 2004, Monetary Policy Statement, Third Quarter to 30