Economic Research Project on Equity Bank of Nigeria Ltd

ECONOMIC RESEARCH PROJECT ON EQUITY BANK OF NIGERIA LIMITED

Economics for Business Module Project

Prepared By: Oluchi Ezem

Student Number: 841614

Date: April 20, 2005

Course: MBA-BE-050310-01

Economic Research Project on Equity Bank of Nigeria Limited______________________

Contents

1. Objectives ------------------------------------------------------------------ 4

2. Introduction ---------------------------------------------------------------- 6

3. Chapter 1: The Company and The Product------------------------ 7

1.1 Background --------------------------------------------- 7

1.2 Structure ------------------------------------------------- 8

1.3 Directors' Interest -------------------------------------- 8

1.4 Financials ------------------------------------------------ 9

1.4.1 Balance Sheet ------------------- 9

1.4.2 Profit and Loss Account ----- 10

1.4.3 Performance Ratios ---------- 10

1.5 Products and Services ------------------------------ 11

1.6 Treasury and Financial Services ------------------ 11

1.6.1 Commercial Deposits --------- 11

1.6.2 Electronic Banking ------------ 12

4. Chapter 2: Industrial Context and Competition ------------------- 15

2.1 The Nigerian Business Environment ------------- 15

2.2 The Banking Industry ---------------------------------16

2.3 The Players -------------------------------------------- 17

2.4 Result of consolidation ------------------------------ 17

2.5 Competition -------------------------------------------- 18

5. Chapter 3: My Company: Labour, Capital and Government - 20

3.1 Labour --------------------------------------------------- 20

3.2 Capital --------------------------------------------------- 22

3.3 Government -------------------------------------------- 22

6. Chapter 4: The Macroeconomic Context of Doing Business -- 24

Figure 1: Nigeria: Crude Oil Prices -------------------- 24

Figure 2: Nigeria: External Reserves ----------------- 25

Figure 3: Nigeria: Inflation Rates ----------------------- 26

Figure 4: Nigeria: Exchange Rates -------------------- 27

7. Chapter 5: Some Strategic Lessons --------------------------------- 29

5.1 Threats --------------------------------------------------- 29

5.2 Opportunities ------------------------------------------- 30

5.3 Weaknesses ------------------------------------------- 31

5.4 Strengths ----------------------------------------------- 32

5.5 Strategic issues and conclusion ------------------ 33

8. Appendix 1: Five year financial summary of Equity Bank ----- 35

9. Appendix 2: Tows Analysis of Equity Bank of Nigeria Ltd ---- 36

10. Appendix 3: Documentary References --------------------------- 37

OBJECTIVES

"Economics for Business" is an MBA module that has been packaged in such a way that a student would be able to apply the economic concepts learned to actual business situations. In line with the above, this project has been designed to show the application of some of the economic concepts learned to the company I presently work for - EQUITY BANK OF NIGERIA LIMITED.

"Chapter 1: The Company & The Product" describes the bank and the products and services it deal with. A brief historical perspective and its organizational structure are presented in addition to a description of the location of its physical facilities. Emphasis was laid on the features of the financial products/services; their uniqueness and usefulness where not overlooked.

Next is a description of the banking industry in which Equity Bank operates. In this chapter, "Industrial Context & Competition", an overview of the industry was analyzed; its present outlook and future possibilities. The challenges ahead of it and the competition it faces due to changing technology were also considered.

An in depth analysis of the effect of labour and government in the life of the company was discussed in "Chapter 3: My Company, Labour, Capital and Government". The labour mix required in the company was compared against the existing pool of labour. Issues relating to the implementing of new technology and its impact to the labour force in the company and to the nation as a whole were analyzed. Chapter 3 also gives insight to the importance of capital, its costs and availability to the "health" of your company. Government's role in the business was discussed and the extent of intervention through its regulations was considered.

Chapter 4 borders on "The Macroeconomic Context of Doing Business"