CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
The place of bank in the life of any nation cannot be over emphasized for instant, commercial bank started in Nigeria sometimes in 1891, the early generation banks contributed tremendously towards the economic development of the country. However, with the advent of second and third generation banks, there were sign of distress. Indeed distress in banks became a big source of concern of the entire financial system even though the scale was generally midst until 1989. Before this time, serious incidents of distress were relatively few and generally amendable to control by the monetary authorities. In the banking industry for example, the number of banks adjusted technically distressed rose steadily from 8 in 1990 to 42 in 1994 and 51 by the end of 1995 etc. As a result of the central position of banks in the financial sector, it would be safe to assume that issues as the relate to banks is to a large extent, effectively of the financial industry.
The banks in financial distress between 1994 to 1999 accounted for about N16.7 billion or 10.3 percent of the deposit liabilities of the banking system and N15.6 billion or 15 percent of the systems outstanding loans and advances. More than two thirds of the aggregate loans of such banks were non-performing while their aggregate adjusted capital stood at N4.7 billion. The extent of distress in the primary mortgage institution, community banks and financial companies is not different from that of the conventional banks invariably, a good number of these institutions have been closed down while cases of breach of contractual obligation to depositors abound. Therefore, this study aimed at identifying the banks distress and banking habit of potential customers using the situation in Ughelli south Local Government Delta State.
1.2 PURPOSE OF THE STUDY
This project work intends to know the meaning of banks distress and banking habit consequently, the purpose of this study was to determine the effect of banks distress and banking habit of Ughelli south people.