ABSTRACT
This study focuses on Impact of Reward System on Performance of Selected Money Deposit Banks in Anambra State, Nigeria. The study sought to determine the effects of contingency pay on productivity in selected Money Deposit Banks in Anambra State, ascertain the extent to which employee recognition enhances employee performance in selected Money Deposit Banks in Anambra State, determine the extent of the relationship between variable pay and customer satisfaction in selected Money Deposit Banks in Anambra State, identify the effects of career opportunity on manpower development in selected Money Deposit Banks in Anambra State. The study had a population size of 1858, out of which a sample size of 369 was realised using Zigmund formula at 5% error tolerance and 95% level of confidence. Instruments used for data collection were primarily questionnaires and interview. Out of 369 copies of the questionnaires that were distributed, 350 copies were returned while 19 were not returned. The descriptive survey research design was adopted for the study. The hypotheses were tested using Pearson Product Moment Correlation Coefficient and Simple Linear Regression statistical tools. The findings indicated that contingency pay had significant effect on productivity (r = 0.652; t= 13.209; F= 174.480; p = 0.00 < 0.05). Employee recognition had significantly enhanced employee performance (r = 0.534; t = 12.589; F= 158.495; p= 0.000 < 0.05). There was a significant relationship between variable pay and customer satisfaction (r = 0.955; p= 0.000 < 0.05). Career opportunity significantly affected manpower development in Money Deposit Banks (r = 0.717;t = 20.524; F = 421.248; p = 0.000 < 0.05). The study concluded that reward system is a vital tool for employees’ effectiveness and efficiency on their job. The study recommended that organizations should adopt contingency pay strategy, which will help to retain and attract talented employees that will assist in promoting organizational productivity.
CHAPTER ONE INTRODUCTION
1.1 Background of the Study
Reward system is an important tool that management can use to channel employee motivation in desired ways. In other words, reward systems seek to attract people to join the organization to keep them coming to work, and motivate them to perform to high levels. The reward system consists of all organizations components – including people, processes, rules and decision making activities involved in the allocation of compensation and benefits to employees in exchange for their contribution to the organization (Puwanenthiren, 2011).Reward systems are ways of promoting individual and organizational behaviour needed to achieve the organizational strategy and the organization’s goals (Lawler, 1995; Kerr and Slocum, 2005).
In order for an organization to meet its obligations to shareholders, employees and society, its top management must develop a relationship between the organization and employees that will fulfill the continually changing needs of both parties. At a minimum the organization expects employees to perform reliably the tasks assigned to them and at the standards set for them, and to follow the rules that have been established to govern the workplace. Management often expects more: that employees take initiative, supervise themselves, continue to learn new skills, and be responsive to business needs. At a minimum, employees expect their organization to provide fair pay, safe working conditions, and fair treatment. Like management, employees often expect more, depending on the strength of their needs for security, status, involvement, challenge, power, and responsibility. Just how ambitious the expectations of each party are, vary from organization to organization. For organizations to address these expectations an understanding of employee motivation is required (Beer, Spector, Lawrence, Mills, and Walton, 1984).
A well designed and functional reward system is an efficient way to increase employeework motivation. The appropriate type of reward is developed in accordance to thecompany’s reward philosophy, strategies and policy. However, it might be challengingto find the right way to combine the company’s integrated policies and practices together with the employee’s contribution, skill and competence. (Armstrong,
1999).
Kerr and Slocum (2005) define the reward system as to who gets rewarded and why. They also suggest reward systems to be powerful means of influencing organisational culture, and that reward system is a primary method of achieving control. Also, with regards to reward systems they state: the reward system defines the relationship between the organization and the individual member by specifying the terms of exchange: It specifies the contributions expected from members and expresses values and norms to which those in the organization must conform, as well as the response individuals can expect to receive as a result of their performance. (Kerr and Slocum,
2005). The reward system is a group of neural structures that are critically involved in mediating the effects of reinforcement. A reward is an appetitive stimulus given to a human or some other animal to alter its behavior. Rewards typically serve as reinforcers. Messmer, (2008) assert that a reward system is a structured method of evaluating and compensating employees based on their performance. Reward system Procedures, rules, and standards associated with allocation of benefits and compensation to employees (Kerr and slocum, 2005).
The current financial crisis the world is experiencing has made the reward system, with focus on bonuses and viable remuneration, a highly debated topic in media. Reward systems are often used as a management tool for achieving desirable objectives. One of the most common purposes is to motivate employees to perform better (Ax, Christer and Kullven, 2006). When workers are motivated, they are more likely to perform better. Improved worker performance quickens the achievement of corporate objectives.
Organizations are established to accomplish specific objectives. The organization that wishes to achieve these objectives must have a competitive and perhaps a comprehensive total reward system that is aligned with the organization’s business strategy and that reflects the competitive reality of the labour market. In a world where people have become more and more demanding about their lives and surroundings, the reward system could be used to motivate employees by satisfying these demands. However, there exists a lack of understanding in how to motivate all those high demanding individuals, making most of the reward systems sub-optimized. To create an optimal reward system, we need to better understand what really motivates, and what does not.
Individuals working for organisations are all different; their needs, thoughts and experiences are different and they are all motivated by different things. Thus, it would be more correct if the rewards also were individualized. It is important for every employer to find what motivates each employee. In a perfect world, the company has resources to ensure that all employees have a meaningful job, but this is far from reality. People want to feel that what they do make sense. What motivates us will change over time. What was seen as meaningful 25 years ago may not feel as meaningful today. We are motivated by different things depending on where we are in our development. A young worker is likely to be keener on development possibilities, while an older one is more anxious about security and to be able to use his experience (Jagult, 2005).
Banks have been keen on growth and expansion and this has led to continuous war for talent to operate in subsidiaries in the regional market and to steer innovation. In top demand are people who are technologically literate, globally astute and capable of not only developing but also executing strategy, setting off a scramble for staff among the top firms. However, in as much as banks worked to get people with the greatest potentials to occupy positions, employee maintenance has become a challenge for many of them due to the high labour costs involved, constituting up to 60 per cent of the total costs (Cherotich, 2012).
In attempts to remain competitive and profitable, banks have resorted to cost reduction, the first casualty being the human capital investment like cutting back benefits and recruitment, freezing or cutting salary increases, promotion and development programmes like training. Unfortunately, focus is on payrolls to reduce the cost to income ratio with most banks aiming below 50 per cent level. Employees interpret the labour cost cutting measures as a breach of trust, making it more difficult for firms to retain key talent (Perry, Mesch, and Paarlberg, 2006). The outcomes of such an event are reduced staff motivation and satisfaction leading to low output levels, loss of morale, lowered organizational commitment, work withdrawal behaviours such as absenteeism and lateness, increased turnover, mistrust, uncertainty and insecurity.
This presupposes that, for organisations to achieve their goals, employees’ performance should be, at least optimum. Workers have to be motivated to perform above average or encouraged to maintain high performance level. Hence, in today’s business culture, rewards, recognition and an enjoyable workplace have become extremely important for
many reasons. Motivation is the key that gets people to do what they do. Armed with the knowledge of what is most important, creative solutions and the appropriate financial resources can be devoted to addressing the key issue. Without this knowledge, too much well-meaning effort might be expended trying to fix things that are not all that important to employees (Kreitner and Kinicki, 1998). It is in the light of this that issues concerning the employees are considered the driving force of every organization and must be given the needed attention, as it will affect their performance and the organization at large. One of the key issues that concern every worker in an organization has to do with the reward or compensation for their effort.
1.2 Statement of the Problem
The types of reward in most organizations usually are not performance based. Thus they are not linked in any way to business structure and employee recruitment, retention, motivation, performance, feedback and satisfaction. Moreover, the recipients of these rewards in most organizations do not participate in the planning and the implementation of the reward systems in organizations. Further, there are a number of loopholes in the administration of the various ways of rewarding employees in organizations. Again, most organizations view reward system as only the monetary compensation given to employees to compensate them for their performance, whereas rewards should be everything that goes into motivating the individual employee to give out his best. The study will evaluate the reward systems of the banking system in Nigeria and establish whether their current reward systems have any bearing on corporate performance.
It is an undisputable fact that rewards can enhance workers’ performance and hence improve corporate performance. The extent to which a worker does his or her work effectively and efficiently depends on the level of motivation received. It is known that individuals differ in likes and interest, as what motivate one may not motivate the other. Thus, the study wants to determine the components of reward system in the banking system of Nigeria and the extent to which the existing reward system has improved corporate performance.
Finally, among the empirical studies that dealt with reward system in organizations and its relationship with factors such as employee motivation, employee performance, employee satisfaction and effect on quality of work done, showed reward to have a positive effect. However, different rewards seem to have a different impact on
employee attitude, satisfaction and performance. However, there are mixed findings when it comes to individual rewards and their effect on performance.
1.3 Objectives of the Study
The main objective of this study is to determine the impact of reward system on performance in selected Money Deposit Banks in Anambra State. The specific objectives were to:
1. Determine the effect of contingency pay on productivity in selected Money
Deposit Banks in Anambra State.
2. Ascertain the extent to which employee recognition enhance employee performance in selected Money Deposit Banks in Anambra State.
3. Determine the extent of the relationship between variable payand customer satisfaction in selected Money Deposit Banks in Anambra State.
4. Identify the effects of career opportunity on manpower development in selected
Money Deposit Banks in Anambra State.
1.4 Research Questions
The following questions guided the study:
1. What are the effects of contingencypay on productivity in selected Money
Deposit Banks in Anambra State?
2. To What extent does employee recognition enhance employee performance in selected Money Deposit Banks in Anambra State?
3. What is the extent of the relationship between variable pay and customer satisfaction in selected Money Deposit Banks in Anambra State?
4. What are the effects of career opportunity on manpower development in selected Money Deposit Banks in Anambra Stat?
1.5 Research Hypotheses
The following Hypotheses were tested in order to achieve the stated objectives of this study:
H1(i): Contingency pay has significanteffect on productivity in selected Money
Deposit Banks in Anambra State.
H1(ii): Employee recognition significantly enhancesemployee performance in selected
Money Deposit Banks in Anambra State.
H1(iii): There is a significant positive relationship between variablepay and customer satisfaction in selected Money Deposit Banks in Anambra State.
H1(iv): Career opportunity affects manpower development in selected Money Deposit
Banks in Anambra State.
1.6 Significance of the Study
The study will benefit the bank employees and the bank management, the academic community and the general public.
The bank management and the banking system generally will be provided with an insight into the major components of rewards that motivates their staff. A well designed system for rewarding labour greatly has a bearing on the output of employees and therefore impact on the performance of the organization as a whole. Banks that seek to optimise their corporate objectives can anchor on total reward system.
Reward represents by far the most important and contentious element in the employment relationship, and is of equal interest to the employer and employee. Thus, the findings of this work could enhance work relationship in the banking system. Meeting the needs of employee can be a veritable tool to managing work conflict; with this study, employers will appreciate the core reward items that solved the needs of their employees in Nigerian banking system.
When banks appreciate reward components that best motivate their staff, bank employees will be better off in terms of job satisfaction. Satisfied employee can be more productive and less job turnover as well. To the employer, these factors represents a significant part of business costs; it is increasingly important to employersas it affects its ability to recruit and retain a quality labour force; to the employee it is fundamental to his standard of living and is a measure of the value of his services or performance.
The academic community will appreciate new findings and contribution to knowledge resulting from this study. The students of management will gain knowledge of the issues to influence individual as well as corporate performance in the banking system and other corporate world generally. The study will be case in point that different industry workers can be motivated differently.
Generally, anybody who studies this work will understand the current issues on reward system and its effect on workers’ performance. The study will bring to the fore the fact
that “when you reward, you motivate; and when you reward effectively you motivate better to achieve your objectives”. Thus, the general public will be aware that the nature of reward has effect on the level of motivation obtainable from the worker. In other words, the general public may know that what motivates one may not motivate the other.
1.7 Scope of the Study
The study focused on the banking system as one of the financial institutions in Nigeria. It is predicated on the assumption that good reward systems have bearings on corporate performance. It assessed the current systems and their limitations as well as advantages and the level of employee involvement in the design and implementation of such reward systems. The study involved all cadres of employees including, branch managers, sales, mortgages, loan and marketing officers, tellers, accounts clerks, auditors, computer specialists, receptionists, sales representatives, and marketers of banks and their products. This study was limited to the effects of reward on performance among banking employees. The banks are First Bank, FCMB, Zenith Bank, Keystone Bank and Union Bank Plc: the study was carried out at Anambra State and the time range for the study was from 2004 to 2014
1.8 Operational Definition of Terms
Recognition: Recognition refers to the respect an employee enjoys among colleagues in the organization, which is as a result of the status or value of his job.
Motivation: Is defined as the force or process, which causes individuals to act in a specific way.
Compensation:Compensation is what employee receives in exchange for their contribution to the organization.
Incentive: Incentives are payments made to an employee or group of employees based on the amount output or results achieved or payments made for the purpose of motivating employees’ performance.
Rewards: Rewards are incentives that are promised and given to a worker for doing a job in an organisation.
Monetary Rewards: Monetary rewards are financial rewards or direct cash payments which consist of performance pay, competency pay, gain sharing and profit sharing to workers for their performance or contribution in an organization.
Non-monetary Rewards: Non-monetary rewards are non-cash rewards which consist of all intrinsic motivators such as achievement, responsibility, opportunity for growth and extrinsic motivators such as recognition, job enrichment and praise.
Premium Pay: Premium pay is additional pay provided to employees for working certain types of hours or under certain types of conditions. Example is working on weekends, holidays, vacation days or working during hours deemed less desirable. Benefits: Benefits are programs an employer uses to supplement the cash compensation that employees receive. These are health, income protection, savings and retirement programs, provision of security for employees and their families.
Work-life: A specific set of organizational practices, policies and programs plus a philosophy that actively supports efforts to help employees achieve success at both work and home.
Performance: Performance is the alignment of organization, team and individual efforts towards the achievement of business goals and orgainsational success. It includes establishing expectations, skill demonstration, assessment, feedback and continuous improvement.
Development:A set of learning experiences designed to enhance employees’ applied
skills and competencies.
Career Opportunities: Involves the plan for employees to advance their career goals. It may include advancement into a more responsible position in an organization.
Staff Engagement: Higher level of staff commitment, that is aligning self in totality to goals, mission/vision of the organization.
1.9 Background Information on the Nigerian Banking Environment
The history of the Nigeria banking system is replete with growth and burst cycles in the number of operating banks and their branches. Usually growth spurts are experienced when the policy environment present strange business opportunities in the banking sector or there is a sudden policy shift that makes it easy for ordinary business people to initiate a process that creates access to public funds in the name of bank deposits. The Central bank of Nigerian’s resolve to carry out reforms in the banking sector was borne out of the past of the nation’s banking industry. Between 1994 and 2003 a space of nine years, no fewer than 36 banks in the country closed shop due to insolvency. In 1995 four banks were closed down. But 1998 may go down well in history as the saddest year for the banking industry as 26 banks closed shop that year.
Three terminally ill banks also closed shop in 2000. In 2002 and 2003 at least one bank collapsed. The failed banks had two things in common – small size and unethical practices. Of the 89 banks that were in existence as at July 2004, when the banking sector reforms were announced, no fewer than 11 of them were in a state of distress. According to the CBN, between 69 and 79 of the banks were marginal or fringe players (Soludo, 2004). The decade 1995 and 2005 were particularly traumatic for the Nigerian banking industry; with the magnitude of distress reaching an unprecedented level, thereby making it an issue of concern not only to the regulatory institutions but also to the policy analysts and the general public. Thus the need for a drastic overhaul of the industry was quite apparent. In furtherance of this general overhauling of the financial system, the Central Bank of Nigeria introduced major reform programmes that changed the banking landscape of the country in 2004. The main thrust of the 13-point reform agenda was the prescription of minimum shareholders’ funds of 25 billion. In view of the low financial base of these banks, they were encouraged to merge. Out of the 89 banks that were in operation before the reform, more than 80 percent (75) of them merged into 25 banks while 14 that could not finalize their consolidation before the expiration of deadline were liquidated (Elumilade,2010; Afolabi, 2004). In terms of Asset, the total asset of all the 89 banks operating in Nigeria in 2004 prior to the consolidation was N3,753.28 billion (US$28.250 billion) and rose to N6400.78 billion (US$49.88 billon) indicating a growth rate of 70.54.16 per cent within one year after consolidation. The asset size of an average bank which was N42.172 billion (US$0.3174 billion) grew geometrically toN267.482 billion (US$2.0856 billion) within a year after the consolidation exercise, a growth rate of 534.27percent. This was an impressive performance. However, an assessment of the level of capitalisation of an average bank prior to consolidation exercise indicates an equity base (Net worth) of N7.71 billion (US$0.06168 billion) rising to N38.83 billion (US$0.31064 billion) in2006, indicating a growth rate of 404 percent. The leverage ratio measured in terms of equity to total asset also declined from 18.28 per cent in 2004 to 14.52 per cent in
2006 for an average bank. This ratio compares favourably with the CBN minimum
level of 10 per cent. The post consolidation ratio is also better in term of its distribution among the banks compared with the pre-consolidation ratio where more than 70 per cent of the equity and assets were concentrated in (the largest five banks) less than 5 percent of the existing banks. However, the intermediation activities of an average bank improved significantly by about 1,690 per cent from an average deposit base of N10.48 billion (US$0.08384) in 2004 to N188.48 billion (US$1.50784) in 2006 (Somoye,
2008). Analysis of the role of commercial banking sector relative to the economy enables appreciation of whether the banking industry will assume any appreciable level of importance in the aggregate economy as a result of consolidation.
The assets of commercial banks which stood at 32.89 per cent of the GDP in2004 rose marginally to 35.43 per cent in 2006. The degree of private sector credit has been suggested to be a better indicator of bank contribution to private investment. In 2004, commercial banks channeled 24.08 percent of their lending to the non-bank private sector, but this declined to 22.47 per cent by 2006. Likewise, the value of commercial bank credit relative to the GDP which was 2.73 per cent in 2004 rose marginally to 2.91 percent in 2006. There has not been any appreciable growth in terms of the growth in credit to the private sector because the commercial bank credit which has a growth rate of 26.6 percent between 2003 and 2004 grew marginally to30.8 percent in 2006 and declined to 27.82 percent a year after the consolidation.
The relative performance of the banking size in terms of asset size, private sector credit, relative to the economy have been very marginal such that it can be safely concluded that the consolidation exercise has not brought about any meaningful contribution with respect to some of these performance indicators. Since its creation in 1892, Nigerian banking sector has experienced very turbulent environment due to unstable policies and uncertainty. I n 2009 Central Bank of Nigeria carried out an audit of the banking sector in which nine banks failed. The failure of these banks necessitated the intervention of Central bank of Nigeria inform of bailed out because the banks that failed the audit had negative shareholders fund as a result of high percentage of non-performing loans. The failure of some commercial banks to meet up with financial performance after consolidation requires a rethink to evaluate their performance using non-financial measures, thus this study is designed to evaluate the performance of consolidated banks using non-financial measures. The objective of the study is to evaluate the performance of consolidated banks using non-financial measures.
1.10 Profile of Selected Banks
First Bank of Nigeria Plc
First Bank of Nigeria PLC is a Nigeria-based bank that offers a range of financial services. First Bank of Nigeria is a Nigerian bank and financial services firm. It is the country’s third biggest bank. First Bank traces its ancestry back to the first major
financial institution founded in Nigeria; hence the name. The current chairman is Prince AjibolaAfonja. The bank is the largest retail lender in the nation, while most banks gather funds from customers and loan it out to large corporations and multinationals, First Bank has created a small market for some of its retail clients. At the end of September 2011, the bank had assets totaling approximately US$18.6 billion (NGN: 2.9 trillion). The bank’s profit after tax, for the nine months ending 30 September 2011 was approximately US$270.2 million (NGN: 42.2 billion). First Bank of Nigeria maintains a subsidiary in the United Kingdom, FBN Bank (UK), which has a branch in Paris. The bank also has representative offices in South Africa and China. In October 2011, the bank acquired Banque International de Credit (BIC), a leading bank in the Democratic Republic of Congo (DRC).
The company was named the best bank in Nigeria by Global Finance Magazine in September 2006. The firm’s auditors are PricewaterhouseCoopers (Chartered Accountants). The firm has solid short and long term ratings from Fitch and the Global Credit Rating Company partly due to its low exposure to non-performing loans. The firm’s compliance with financial laws has also strengthened with the Economic Financial Crimes Commission giving it a strong rating.
In June 2009, Stephen OlabisiOnasanya was appointed Group Managing Director (CEO), replacing Sanusi Lamido Sanusi, who had been appointed governor of the Central Bank of Nigeria (www./First_Bank_of_Nigeria).
First City Monument Bank Plc
First City Monument Bank (FCMB) Ltd is a full service banking group, headquartered in Lagos, Nigeria, with the vision ‘to be the premier financial services group of African origin’. FCMB is a large financial services provider in Nigeria, offering retail banking, corporate banking and investment banking services to large corporations, small and medium enterprises, as well as individuals. As of December 2011, the bank’s total assets were valued at US$$3.65 billion (NGN: 593.3 billion), with shareholders’ equity of approximately US$772.2 million (NGN: 117.4 billion).
The entity from which the bank was founded City Securities Limited, was established in 1977. First City Monument Bank Ltd. was incorporated as a private limited liability company on 20 April 1982 and granted a banking licence on 11 August 1983. It was the first bank to be established in Nigeria without government or foreign support. On
15 July 2004, FCMB changed its status from a private limited liability company to a public limited liability company and was listed on the Nigerian Stock Exchange (NSE)
by introduction on 21 December 2004. In November 2010, both FinBank and First City Monument Bank (FCMB) announced that FCMB has expressed interest in acquiring shareholding and become the strategic investor in FinBank, another Nigerian commercial bank that was undercapitalized. In February 2012, following regulatory approval, FCMB acquired 100% shareholding and began integration of FinBank in its existing operations.
Subsidiaries
First City Monument Bank has a number of active non-bank subsidiaries, which together with the bank, form the First City Group. Members of the group include the following companies:
1. FCMB Capital Markets Limited – Investment banking & Advisory services – Lagos, Nigeria
2. FCMB (United Kingdom) Limited – Investment banking – London, United
Kingdom
3. CSL Stockbrokers Limited – Stock brokerage services – Lagos, Nigeria
4. Legacy Pension Fund Administrators – Pension Fund Administrators – Abuja, Nigeria
5. Credit Direct Limited – Microfinance lending – Lagos, Nigeria
(http://org/wiki/First_City_Monument_Bank).
Keystone Bank Plc
On 5 August 2011, Keystone Bank Limited (Keystone Bank or the bank) assumed the deposit liabilities, certain other liabilities and assets of Bank PHB Plc following the revocation of Bank PHB’s operating License by the Central Bank of Nigeria (CBN). Keystone Bank is a technology and service-driven bank with subsidiaries in the Gambia, Sierra Leone, Liberia and Uganda, and a vibrant and professional workforce, the bank operates with best practices and offers leading solutions and services to its clients and associates. A leading financial services institution located in Nigeria, Bank PHB is strongly positioned as Africa’s fast emerging centre of innovative financial solutions to a growing and diverse global customer base. The bank strategic intent is to build a diversified franchise, creating superior value for all stakeholders through unrivalled customer service experience, superior shareholder value, a conducive work environment, and commitment to corporate citizenship. Bank PHB has emerged as one of Africa’s fastest. Keystone Bank drives its current and future successes from a very solid vision and mission statements:
Vision:
To set the pace in financial services delivery, creating utmost value for our stakeholders
Mission:
To deliver consistent superior performance and be the preferred partner
Core Values – S. P. I. R. I. T.
Service Passion Innovation Resilience Integrity Team Work
Union Bank of Nigeria Plc
Union Bank of Nigeria’s rich history can be traced to 1917 when it was first established as Colonial Bank. In 1925 the bank became known as Barclays Bank DCO (Dominion, Colonial and Overseas) resulting from its acquisition by Barclays Bank. Following Nigeria’s independence and the enactment of the Companies Act of 1968, the bank was incorporated as Barclays Bank of Nigeria Limited (BBNL, est. 1969). Between 1971 and 1979, the bank went through a series of changes including its listing on the NSE and share acquisitions/transfers driven by the Nigerian Enterprises Promotion Acts (1972 and 1977); this resulted in its evolution into a new wholly Nigerian-owned entity. To reflect the new ownership structure, and in compliance with the Companies and Allied Matters Act of 1990, it assumed the name Union Bank of Nigeria Plc. (UBN “the Bank” or “Union Bank”).
In 1993, in line with its privatization/commercialization drive, the Federal Government divested by selling its controlling shares (51.67%) to private investors. Thus, Union Bank became fully owned by Nigerian citizens and organizations all within the private sector. During the Central Bank of Nigeria’s banking sector consolidation policy, Union Bank of Nigeria Plc acquired the former Universal Trust Bank Plc and Broad Bank Ltd. and absorbed its one-time subsidiary, Union Merchant Bank Ltd. On the 14th of August, 2009, the Central Bank of Nigeria (CBN) intervened in the management of the Bank by replacing the Executive Management Team with a five-man Interim Management Team to stabilize and recapitalize the Bank. Full recapitalization of the Bank was achieved in December 2011 with the injection of $500million into Union Bank by Union Global Partners Limited (UGPL) after the Asset Management Company of Nigeria (AMCON) had provided capital in the sum of N46.93bn to bring the Bank’s Net Assets Value to zero.
Currently, the Bank is primarily owned by UGPL (65%) and AMCON (20%) and a diverse group of shareholders that account for the balance (15%). UGPL, a consortium of strategically aligned group of investors, is the Bank’s core investor group and consists of:
African Capital Alliance
ADC African Development Corporation
Corsair Capital
FMO (the Netherlands Development Finance Company)
Chandler Corporation
Standard Chartered Private Equity
Union Bank of Nigeria Plc. has an asset base of over N826.7 Billion Naira and shareholders’ funds in excess of N183.1 Billion Naira. The bank’s impressive track record over the years has secured its position as Nigeria’s most dependable bank. Union Bank is primarily focused on commercial and retail banking in the Real
/Agriculture/Public Financing sectors. Among the bank’s markets are retail, small and
medium sized enterprises, real estate, corporate/commercial, correspondent, and trade finance. The bank also offers investment and financial management, trust services, private banking, insurance services, and pension services. The bank’s commercial clients include communications, agriculture, energy, public utilities, retailing, and other specialty industries
The Union Bank Group
Union Bank has subsidiaries and affiliate companies in Nigeria and across West Africa, providing a range of financial services and products through the following major business segments: Retail & Corporate Banking, Mortgage and Real Estate Services, Insurance, Pension, Stock Brokerage and Asset Management Services. The Group operates an interlocking organizational structure- one that ensures effective oversight and participation in the decision-making process of subsidiaries or associated companies, thereby helping to safe guard the Bank’s investment (http://www.unionbankng.com/index.php/about-us/history).
Zenith Bank Plc
Zenith Bank Plc was established in May 1990, and commenced operations in July of the same year as a commercial bank. The Bank became a public limited company on June 17, 2004 and was listed on the Nigerian Stock Exchange (NSE) on October 21,
2004 following a highly successful Initial Public Offering (IPO). Zenith Bank Plc currently has a shareholder base of about one million and is Nigeria’s biggest bank by tier-1 capital. In 2013, the Bank listed $850 million worth of its shares at $6.80 each on the London Stock Exchange (LSE).
Headquartered in Lagos, Nigeria, Zenith Bank Plc has over 500 branches and business offices in prime commercial centres in all states of the federation and the Federal Capital Territory (FCT). In March 2007, Zenith Bank was licensed by the Financial Services Authority (FSA) of the United Kingdom to establish Zenith Bank (UK) Limited as the United Kingdom subsidiary of Zenith Bank Plc. Zenith Bank also has
subsidiaries in: Ghana, Zenith Bank (Ghana) Limited; Sierra Leone, Zenith Bank (Sierra Leone) Limited; Gambia, Zenith Bank (Gambia) Limited. The bank also has representative offices in South Africa and The People’s Republic of China. The Bank plans to take the Zenith brand to other African countries as well as the European and Asian markets.
Zenith Bank Plc blazed the trail in digital banking in Nigeria; scoring several firsts in the deployment of Information and Communication Technology (ICT) infrastructure to create innovative products that meet the needs of its teeming customers. The bank is verifiably a leader in the deployment of various channels of banking technology, and the Zenith brand has become synonymous with the deployment of state-of-the-art technologies in banking.
Driven by a culture of excellence and strict adherence to global best practices, the Bank has combined vision, skillful banking expertise, and cutting-edge technology to create products and services that anticipate and meet customers’ expectations; enable businesses to thrive and grow wealth for customers. Zenith Bank Plc, founded by Jim Ovia in 1990, has, since grown astronomically to become one of the leading financial institutions in Africa. Zenith Bank Plc currently ranks as the 6th biggest bank in the continent. The Bank grew its shareholder’s fund of N20million in 1990 to N509.25billion as at year end 2013. Today, the Bank continues to thrive on the strong values, brand equity, corporate culture of professionalism and service excellence which are the foundations upon which the bank was built
This material content is developed to serve as a GUIDE for students to conduct academic research
IMPACT OF REWARD SYSTEM ON THE PERFORMANCE OF SELECTED MONEY DEPOSIT BANKS IN ANAMBRA STATE NIGERIA
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