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This thesis examines the current transformation on the banking sector in Nigeria. It attempts to examine how the banks, particularly Hallmark bank, plc can reposition itself through recapitalization for competitive advantage. Although the bulk of the literature on the subject matter are on the banking sectors reforms, including the various techniques and strategies in meeting with the 18 months recapitalization deadline the finding makes, conjunctive on the post recapitalization challenges and realities.

The study covers selected commercial banks within Kaduna Metropolis and the management of Hallmark bank Plc Abuja. Within these groups the designed questionnaire were administered for the purpose of data collection.

A total of 24 questions were asked on the questionnaire for the bank managers and another set of 14 questions for the bank customers within the areas covered by this survey.

The study conclusively found that recapitalization is a great milestone in the Nigeria banking sector that is designed to strengthen and revitalize the fragile banking sector in Nigeria. In addition, the expected gains of the reform are enormous for those banks that survive the current reform exercise. On the part of the consuming public, a significant proportion of them have little of no understanding of the need for the reform.

An important recommendation is for the CBN and other stakeholders to create public awareness on the changes opportunities and future of he banks in the past recapitalization era.


CHAPTER ONE – Introduction

1.0    Background of the study

1.1    Historical Background of Hall Mark bank PLC

1.2    Statement of the Problem

1.3    Objectives of the study

1.4    Scope of the study

1.5    Significance of the Study

1.6    Research Question

1.7    Limitation of the study

1.8    Definition of Terms


CHAPTER TWO- Literature Review

2.0    Introduction

2.1    The Rationale behind Recapitalization of Commercials

Banks in Nigeria

2.2    Genesis of Banks failure

2.3    Effects of Distress Bank on the Economy

2.4    The objectives of The banking Reforms

2.5    Mergers and acquisitions as strategies to meet up with Recapitalization deadline

2.6    Rationale for Mergers

2.7    Valuation of Merger Candidates

2.8    Merger Tactics


CHAPTER THREE – Research Methodology

3.0    Introduction

3.1    Research methodology Employed

3.2    Justification of Approach Used

3.3    Research Instrument Used

3.4    Research Population and Sampling size

3.5    Sampling Procedures Employed

3.6    Justification For Sampling Procedures Employed

3.7    Statistical Techniques Used to analyzing Data

CHAPTER FOUR – Presentation and Analysis of Data

4.0    Introduction

4.1    Data Presentations and Analysis

CHAPTER FIVE – Summary, Conclusion & Recommendations

5.0    Introduction

5.1    Summary of Findings

5.2    Conclusion

5.3    Recommendations


         Appendix I

         Appendix II






The Nigerian banking industry has witnessed tremendous changes and expansion since the mid 1980s. Unfortunately the growth and expansion in the sector are not the manifestation of a sound or vibrant banking system known anywhere in the world. Most banks in Nigeria are characterized by inadequate capital base, poor services, high rate of bankruptcy, lack of management expertise, bad debt syndrome and greater exposure to fraud. In addition, many have poor database and lack of reliable information on which sound policy decision can be taken by Board of Directors. This is a fragile banking system which is waiting to explode from the contagion effects of the liquidation of over eleven banks which are technically considered distressed. Currently there are 89 banks in operation in Nigeria, with 79 being considered marginal or fringe players and with over 1,036- Fraud cases in banks in 2003 while N9.3 billion was lost through fraudulent activities.BANKING SECTORS

A poor banking system of this nature creates unquantifiable problems and crisis in the economy which could result in thousands of people losing their jobs, lost of depositors’ money, lost of confidence in the banking system and above all the banks can have little contribution to the economic development of the country.

Essentially, the objectives of the new, banking sector reform through recapitalization of N25 billion for each bank intends among other things to take proactive steps to prevent an imminent systemic crisis and collapse of the banking industry, create a sound banking system that depositors can trust, create banks that investors can rely upon to finance investments in the economy to drive down the cost structure of banks and make them more competitive and development oriented and to ensure Nigeria meets minimum requirements for regional financial system integration, effectively, positioned to be a key. African regional and global player.BANKING SECTORS

Taking this step is imperative for the survival of the fragile banking system in Nigeria and to be at per with the global trend. Generally speaking, the current average capitalization of banks in Nigeria is less than $10 million or N1.3 billion and with the largest bank in Nigeria having $298 million compared with the smallest Malasian bank with $526 million. This is an important indices for an understanding of the unique nature of the Nigerian banking system among developing economics.BANKING SECTORS

In the study an attempt has been made by examining the fragile Banking system of Nigeria, the need for recapitalization, the various strategies by Commercial Banks to meet the recapitalization requirements and how recapitalization can enhance repositioning of Commercial Banks in competitive marketing environment of Nigeria. Although the full policy implementation of recapitalization takes effect from December 2005, this study provides an insight into the anticipated challenges of post-recapitalization era. These challenges as evident in the current mergers and acquisitions by smaller Banks provide input for academic research and analysis. In addition, it is also the intention of this study to outline the various repositioning strategies of Hallmark Bank Nigeria Plc. towards meeting the challenges of the Banking sector reforms in maintaining a leading position among New Generation Banks in meeting the CBN recapitalization requirement deadline.BANKING SECTORS

It is hope that the finding of this research study would provide a pioneering blue-print for commercial banks in Nigeria to adequately cope with post-recapitalization challenges of the marketing scenario.


The bank was incorporated on 29th October 1990 as Hallmark Bank Nigeria Limited. It was granted license to carry on commenced business on 22nd January 1991. It commenced business on 2nd April 1991. It changed its name to Hallmark Bank Limited on 24th April 1991. It became Hallmark Ban Plc on 24th September 1996. The principal activity of the bank through out the years continued to be provision of commercial banking services such services include granting of loans and advances, project financing, trade finance activity and money market operations.


With 32 branches to date, 9 in Lagos, 3 in Oweri, two each in Aba, Port Harcourt and Abuja, One in Onitsha, Ummahia, Bonny, Awka, Enugu, Warri, Jos, Abakaliki, Uyo, Kano, Maiduguri, Benin, Otigbo and Kaduna, Hallmark Bank is expanding in line with growth strategy to position it closer to its customers and to harness the penitential of the Nigerian Market. All the bank’s branches are interconnected via Hallmark global Banking System (HGBS) to enable you access your account from any of the bank branches.BANKING SECTORS


In this era of globalization, when technology offers banks enormous leverage in capturing niche markets. Hallmark Bank cannot but play in the top most segment of the Information Technology race. The deployment of the latest Information technology from the IBM stable The IBM risc model P 670 serve as a further demonstration of their desire to deliver to customers, financial services at the speed compatible with the best any where in the world.


Hallmark Bank is the second financial Institution in Nigeria to have acquired this Infrastructure. To Safeguard the equipment and direct Internet background has been installed as a first step towards launching full internet banking service later this year.BANKING SECTORS

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