1.1       Background to the Problem

Banking sector in Nigeria have undergone series of dramatic changes ranging from distressed banks in the 1990s to failed banks and later exit of these banks (Ogunleye, 2005). The  Central  Bank  of  Nigeria (CBN) and  the  Nigeria Deposit  Insurance  Corporation (NDIC) reported  that, of the 115 banks in operation  in 1997, 47 were in  varying  states  of  distress,  with  an  average ratio  of  non-performing  assets  of  around  82 per cent. The restructuring of distressed banks starts  with  their  being  put  under  joint  control through  “acquisitions-in-trust”  by  the  NDIC and  the  CBN  for  eventual  sale  to  private operators. Six  mergers between 1996 and 1998 resulted  in  88  net  job  losses  out  of  a  total workforce  of  1,860.  Without  the  mergers, many of the banks would have been closed by regulators  with  the  loss  of  all  the  jobs involved.

Consolidation of the banking industry generally involves a combination of existing banks, growth among the major players in the banking industry; and may lead to  the exit of small and weak banks from the industry (Ogunleye, 2005). Soludo (2004) submitted that the consolidation programme became necessary because the Nigerian banking industry was plagued with  persistent liquidity problems, poor asset management, weak corporate governance, weak capital base, over- dependency on public sector deposits, late or non-publication of annual accounts, and  neglect of small and medium  scale enterprises. The CBN adopted a risk-focused, rule-based regulatory framework predicated on merger and acquisition to implement the bank consolidation  programme. Among other things, the  minimum capitalization of Nigerian banks was increased from 2 billion to  25 billion naira. This reduced the number of banks in Nigeria from 89 (as at June, 2004) to 25 (in December, 2005).

For banks, consolidation has increased inter-bank competition, demands for high returns on investment, a need to retain highly skilled employees, and a bid to avoid the sanctions of the monitoring and regulatory agencies.  Consequently, there is a  shift from transaction  based model to sales/ service model (Ojedokun, 2008). For bank employees in  Nigeria, the effect is  not less. The sales model adopted by banks puts a lot of pressure on the employees to perform, as higher target s are set to justify their pay. For Business Education undergraduates in Nigerian universities, the large number of downsized bank workers discourages them and put a lot of pressure on them to seek alternatives to banking jobs.

It is against this background that this study is set to assess the various banking sector reforms and its implication on employment prospects of Business Education undergraduates in Nigerian universities.

 1.2      Statement of the Problem

Bank mergers and acquisition have significant impact on graduate unemployment.  The extent of graduate unemployment in Nigeria is not justified by the available financial statistics on the phenomenon. This is because of the nature of graduate unemployment in the country where many job seekers do not see the need for registration as unemployed, due to expression of futility in such exercises. This enhances a sharp disparity between the official statistics on the phenomenon and the reality on ground.

The wrong impression of students about the place of Business education also accounts for the deteriorating state of unemployment in Nigeria. There is an enduring societal biased attitude currently rising against mass sacking of bank workers. A large number of parents are discouraging their wards to have ambition in banking jobs but rather, in government jobs.  That is why instead of providing jobs for others, the graduate unemployed persons keep depending  on the government and the non– banking private sector for job offers. However, studies have not been conducted on the connection between bank mergers-acquisition and its effect on students’ career aspirations in the banking sector.

1.3       Purpose of the Study

            The main objective of this study is to assess the series of banking sector reforms; bank mergers and acquisitions, and their attendant effects on students’ career aspirations in the banking sector.

            The specific objectives of the study are to:

  1.  Examine the various roles played by banking reforms in the development of the Nigerian financial system.
  2.  Discuss the influence of these various banking reforms on bank mergers and acquisition
  3.  Determine whether bank mergers and acquisition have significant effect on graduate unemployment
  4. Asses the prospects and challenges which bank mergers and acquisition have on university students’ career aspirations in the banking sector.
  5. Examine whether the merged banks improved in recruiting graduates of business education programme.
  6.  Examine whether merger and acquisition of banks in Nigeria has affected the view of students’ with career aspirations in working in the banking sector after graduation

1.4       Research Questions

  1.   What roles do bank reforms have on bank mergers and acquisition?
  2.  To what extent do the requirements of the merged banks affect the skills acquired by university students’ career aspirations in the banking sector in Nigeria?
  3.   Would bank mergers and acquisition have significant effect on graduate unemployment?
  4.  Would there be any connection between bank mergers-acquisition and students’ career aspirations in the banking sector?
  5.  Has the merged banks improved in recruiting graduates of business education programme?
  6.    Has the merger and acquisition of banks in Nigeria affected the view of students’ with career aspirations in the banking sector?

1.5 Hypothesis

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1.6       Significance of the Study

The entire banking reforms that have been going on in the history of Nigeria since 1952 are of importance to the economic development of the country. The results or outcomes of this study would be of great significance to the banking sector generally and banks that have undergone mergers and acquisition in particular.

The study of this nature handles the contemporary issues affecting graduate unemployment in Nigeria especially in the banking sector. As such, the results would assist the lecturers, policy makers and curriculum planners in Nigeria to design a resilient and entrepreneurial curriculum to absorb the growing number of business education graduates into the workforce.

This study assist not only in identifying the necessary requirement for bank mergers and acquisition, but will also help the bank in adjusting input, in terms of manpower, computers, training, etc, and output, in terms of various products of the banks to enhance revenue.

The recommendations of this study would help the National University Commission and the various Universities offering business education programmes to modify the curriculum and enhance the capacity of the students for them to fit into the modern demands of the banking sector.

Finally, the study would serve as a landmark reference to researchers who may wish to carry out researches on this topic from different perspectives as well as being and addition to knowledge.

1.7             Scope of the Study

This study is on the effects of merger-acquisition in banking industry on students’ career aspiration in the banking sector using some students offering Business Education at Tai Solarin University of Education as case study. It is tedious to consider all consolidated banks hence the emphasis is based on five consolidated banks.

Given the long history of banking reforms in Nigeria and its attendant effect on career aspiration of business education students which is the central focus of this research, the study is covering twelve (12) years period, 2000 to 2012.

Definition of Terms

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1.1 Background to the Study

1.2 Statement of the Study

1.3 Purpose of the Study

1.4 Research Question

1.5 Research Hypotheses

1.6 Significance of the Study

1.7 Scope of the Study

1.8 Limitations of the Study

1.9 Operational Definition of Terms



2.1       Theoretical framework

2.2       The Concept of Mergers and Acquisitions

2.3       Consequences of Bank Mergers-Acquisition on Downsizing and Career Aspirations

of Business Education Students

2.4       Business Education in Nigeria

2.5       Banking Reforms and Curriculum of Business Education

2.6       Bank Mergers-Acquisition and Graduate Unemployment among Business


2.7       Effects of Merger-Acquisition on Career Aspirations of Business Education


2.8       Appraisal of Literature



3.1 Research Design

3.2 Population of the Study

3.3 Sample and Sampling Procedure

3.4 Instrument of Data Collection

3.5 Procedure of Administration

3.6 Method of Data Analysis



4.1 Answers to Research Hypotheses

4.2 Discussion of Findings



5.1 Summary

5.2 Conclusion

5.3 Recommendation



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