Inflation and Unemployment Essay

Recently, the United States of America has been bombarded with a great financial crisis. Many companies resulted to bankruptcy forcing the owners to close their businesses. Other companies had lay-off some workers to lessen the operating costs of their business. Few other companies resulted to cutting the employee’s benefits to avoid laying-off and closure. Workers earning below marginal income resigned from their job in the hope that they could find another job which pays better. Among these responses, the most notable problem is the increase in the rate of unemployment. In a report from Bureau of Labor Statistics (2009) among the 2,309 population in Iowa only 1,602 are employed while 62 are jobless in 2007. In 2008, from 2,325 members of the population, 1,607 are employed while 69 are jobless. Measuring the employment-population ratio of Iowa residents aged 16 years and above, the rate of unemployment was at 69. 4 percent in 2007 and 69. 1 percent in 2008 (U. S. Bureau of Labor Statistics, 2009). Meanwhile, the U. S. Bureau of Labor Statistics (2009) reported that the unemployment rate in Waterloo-Cedar Falls Metropolitan Area rose at 8 percent in February 2009 whereas the jobless rate was recorded at 4. 9 percent. This is relatively high as compared to unemployment rate in 2008 which was at 3. 9 percent and in 2007 which was at 3. 7 percent (U. S. Bureau of Labor Statistics, 2009). State inflation has been identified as one of the major factors that contributed to the increased number of the unemployed. Inflation refers to â€Å"a process in which the average level of prices increases at a substantial rate over a considerable period of time† (Grolier Encyclopedia, 1995, 150). This implies that more money is needed to buy a certain amount of products and services. In Keynesian term, the relationship of inflation and unemployment has been described as: Wage costs are among the costs that rise in response to higher pries. When unemployment is low, employees can old out for full compensation for the higher prices, and raises above that. When unemployment is high, however, the employees will have to settle for less, and so costs do not rise as fast as prices when unemployment is high. (cited in Inflation and Unemployment). Adopting this term in the case of Waterloo-Cedar Falls, the high price of goods and services lead to increase in the number of unemployment since the companies are forced to cut down their human resources to adapt to the increasing prices of goods and services that caused high costs in production. There are also times in Waterloo-Cedar Falls when high unemployment caused high inflation yet the production cost did not increase as fast as the prices. In this situation, high employment is caused by low labor wage. Since the wage is low, the demand for product and services is also low forcing the companies to increase their prices in order to compensate for the low demand of products and services. Analyzing the relationship between inflation and unemployment the following factors are said to contribute to the increase or decrease of the two variables: wage as part of production costs, level of demands and supply, and cost of goods and services. Depending on the movement or behavior of these factors, the level of inflation or unemployment will either increase or decrease. Yet, it does not always follow that when unemployment is high; inflation is also high or vice versa. There are other instances when unemployment is low yet the level of inflation is high or vice versa. Again the increase or decrease in level of the two variables depends on the above mentioned contributing factors. The Waterloo-Cedar Falls, however, tried to address the problems of inflation and unemployment by creating job opportunities for its residents. As expressed by Bob Seymour, Cedar Falls community services manager and economic development director, in an interview by Jim Offner (2009)† â€Å"Obviously, we’re not immune to what’s going on nationally, but we’re pleased that we’ve been able to see some expansion and new-project interest in Cedar Falls right now. The university obviously keeps us on an even keel, and I think our business community has learned to be more diversified and in a better position to weather these down times. Projects like Target Corp. ’s new perishables distribution warehouse and retail developments in Cedar Falls also are helping the city withstand national trends. † (cited in Offner, 2009). This solution however is applicable only for a short period of time. To really solve the problem of inflation and unemployment, Waterloo-Cedar Falls should implement a demand managing policy wherein the government and private sectors will be required to learn how to manage demands in supply (both of labor and product materials) and demands in product and services according to economic situation. Such management is needed so that the people of Waterloo-Cedar Falls will be trained to expect the worst consequences of increase or decrease level of inflation and unemployment. References Grolier Encyclopedia. (1995). Inflation. In U. S. Grolier Encyclopedia of Knowledge 10, 150. USA: Grolier Incorporated. Mc Cain R. A. 2009. Inflation and Unemployment. Retrieved April 24, 2009 from http://william-king. www. drexel. edu/top/prin/txt/AS/where1. html Offner, J. (2009). Local jobless rates among best in state. Retrived April 24, 2009 from http://www. wcfcourier. com/articles/2009/03/11/news/breaking_news/doc49b7a3bf91f75482515049. txt U. S. Bureau of Labor Statistics. (2009a). Over-the-year change in unemployment rates for Metropolitan Areas: Monthly rankings, not seasonally adjusted. Retrieved April 24, 2009 from http://www. bls. gov/web/laummtch. htm. U. S. Bureau of Labor Statistics. (2009b). Regional state and unemployment, 2008 annual averages. Retrieved April 24, 2009 from www. bls. gov/news. release/pdf/srgune. pdf.

Critiquing Internet Sources Essay

The internet is filled with information. Podcasts, videos, and blogs are the most used forms of information on the internet. Three factors that need to be used when evaluating internet sources for use in research are authority, can the speaker be authenticated, and is he qualified to speak on the subject, accuracy, can the information be found in other credible sources, and currency is the information current or when was the last revision to the page? The topic is Elder Abuse, a blog, video, and podcast, have been evaluated pertaining to the subject to show the credibility and reliability of the sources. A blog is a website containing a writer’s or group of writers’ own experiences, observations, opinions, etc., and often having images and links to other websites (Oxford Dictionaries, 2015). The blog Elder Care and Technology is written by a group of writers’ in the Walton Law Firm. The blog explains in detail the impact of modern technology on Elder Abuse. The law firm based in San Diego, California specializes in court cases representing abused elders and their families. The Law firm can be authenticated and has been successful in prosecuting and retaining damages against nursing homes and personal care homes for years (Walton Law Firm, 2014). The blog does show some bias against people and organizations accused of elder abuse. The information in the blog is accurate and valid, because there are links to the law firm site that confirm the blog’s content. The information is current and applicable to the topic of Elder Abuse. A video is the recording, reproducing, or broadcasting of moving visual images (Oxford Dictionaries, 2015). The video Elder Abuse: the Crime of the Twenty-First Century, was produced by The Stein Institute for Research on Aging. The guest speaker is Deputy District Attorney of San Diego County; Paul Greenwood J.D. Attorney Greenwood has prosecuted over  four-hundred felony cases of Elder Abuse, both physic al and financial. The video gives a detailed explanation of what is being done in the state of California to combat Elder Abuse. The speaker is biased towards the prosecuting of those who mistreat the elderly. Attorney Greenwood is a valid source and the information he shares in the video is applicable to this research. The video shares information that can be found in other resources and is just one in a series offered by The Stein Institute for Research on Aging to show the new ideas that the state of California is implementing to fight elder abuse. District Attorney Greenwood is a credible source for information because of his background in the fight against elder abuse. The video is informative and the speaker is clear and concise in his reporting of the facts. A podcast is a digital audio file made available on the internet for downloading to a computer or portable media player, typically as a series, new installments of which can be received by subscribers automatically (Oxford Dictionaries, 201 5). The New York City Elder Abuse center has a series of podcasts about Elder Justice. The center was erected in 2009 to improve professional, organizational, and system responses to elder abuse (NYCEAC, 2013). The most current podcast in the aging series is Ageism, Elder Justice, and The Legacy Project, each podcast has a guest speaker and the speaker on this podcast is Professor Karl Pillemer, a noted author, Director of Bronfenbrenner’s Center for Translational Research, Hazel E. Reed Professor in the Department of Human Development, Professor of Gerontology in Medicine at the Weill Cornell Medical Center, and a collaborator on the Legacy Project (Cornell University, 2015). Professor Pillemer is an expert on the issues of the elderly, and his qualified to express his opinions though somewhat biased in favor of the elderly. He uses his bias in a way that expresses the deep concern for the elderly and their treatment, which tends to sway one to favor his arguments. The podcast is one in a series of valid podcasts and the information is easily applied to this research. The information can also be found in other credible sources on the internet. The information given in blogs, videos, and podcasts are great examples of web-based information. Web-based information has a major influence on how students gather information for research, global citizenship, and multicultural understanding. Web-based information helps develop intercultural literacies that students, parents,  educators, and leadership groups need to live and work as a diverse and globalized population. Web-based information gives the user awareness of the interconnectedness with people and environments around the globe (Department of Education, 2013). Web-based information is being infused in today’s global history classroom curriculum to enable students to have access to the global network of multimedia information while being engaged in self-directed learning activities (Scheidel, 2003). Web-based information influences the understanding of global citizenship and multicultural understanding, because people are able to put themselves in the position of the citizens of foreign countries, which helps them broaden their understanding of the different cultures that they meet right here in the United States, and helps us understand the complexities of ethnicity and culture (Hickling, 2012). Elder Abuse is a subject that has recently been raised by different organizations and advocates that fight for the elderly and their rights. The different blogs, videos, and podcasts, are ways that a researcher can find the relevant information they need to learn more about the subject and the policies being used to combat elder abuse. The internet is the leading source of information in society today. The information by way of blogs, videos, and podcasts are all perfect ways to get and exchange information. The credibility and relevance of the information should be easy to prove and sh ould always be authenticated when using these methods for research. References Ageism, Elder Justice & The Legacy Project (April 22, 2014). Retrieved from: http://podgallery.org/elder-justice-podcast-series/ January10, 2015 Cornell University College of Human Ecology (2015). Karl Pillemer-Bio Retrieved from: http://www.human.cornell.edu/bio.cfm?netid=kap6 January 11, 2015 Department of Education and Early Childhood Development Education for Global and Multicultural Citizenship: A Strategy for Victorian Government Schools 2009-2013. Retrieved from: http://www.education.vic.gov.au/studentlearning/programs/multicultural/default.htm. January 11, 2015. Elder Abuse: The Crime of the Twenty-First Century? – Research on Aging MAY 5, 2014 University of California Television (UCTV) Retrieved from: https://www.youtube.com/watch?v=1JoUapRfjZw January 10, 2015. Elder Care and Technology By Walton Law Firm http://www.nursinghomeabuselawyerblog.com/2014/05/elder-care-technology.html Hickling, F.W. (2012). Understanding Patients in Multicultural Settings: A Personal Reflection on Ethnicity and Culture in Clinical Practice. Ethnicity & Health, 17(1/2), 203-216. Doi:10. 1080/ 13557858.2012 655266. Retrieved from: Ashford University Library, January 14, 2015. Oxford University Press (2015) http://www.oxforddictionaries.com/us/ Scheidet, R.A. (2003). Improving Student Achievement by Infusing a Web-Based Curriculum into Global History. Journal Of Research on Technology in Education. International Society for Technology in Education, 36(1), 77-94. Retrieved from: Ashford University Library, January 14, 2015.

Distance Education Essay

We normally take our studies in a structured establishment called classroom located a place called school. Every day, we wake up early, leave our homes, pay for transportation fees and finally reach to our second home, the classroom. As we welcome ourselves in Mindanao State University, we are lucky to meet different kinds of people from different kinds of places. People from Glan, Tacurong, Marbel and all over Mindanao are your schoolmates and classmates. You share experiences with them, telling stories about their place that makes you as if you were once there. But, what if there are some people who want to study but for some reasons, they cannot go to school, will they be able to study despite their situations they face? Our world is constantly changing and getting more complicated, that is why human beings formulated new innovations and techniques regarding their educational careers. Distance Learning or Distant education is a mode of delivering education and instruction, often on an individual basis, to students who are not physically present in a traditional setting such as a classroom. It is not a face to face interaction just like we do in schools. There is a quite large distance and time between the learner and the teacher. Typical students who enroll at Distant Education courses are people who are too busy in their careers that they have no time to spend in school. Celebrities like Anne Curtis are a student of Distant Education. Or you can be a student with physical disabilities that you find it hard to go to school. Or maybe the courses offered are available only in far places. There are many possible students of this kind of education. There are many modes of communication in distant learning. It can through the telephone, letter or the most common type, the internet where you can see each other and contact directly to one another. There are many instructional materials can be used. It can be an audio tool, video, a print, or a softcopy data. There are some advantages of this type of education. First, it’s potential. The opportunities for distance education have exploded along with increased use of the Internet. The original distance education programs used print materials, but the majority of current programs use online software and programs to replicate a classroom setting. Many degrees are available through distance programs, including high school, college and post-graduate diplomas. There are now distance education options for nearly every career choice, from nursing to accounting. It is also flexible. Distance education provides opportunities for people who may have trouble attending a traditional institution such as stay-at-home moms, people working full time or members of the military. Many online educational programs allow you to work at your own pace, so you can fit your education into your schedule. Also, the cost of distant education is cheaper. In many cases distance education can be considerably cheaper than attending a traditional college. Not only are the classes cheaper, but you can learn from the comfort of your own home and not have to pay for room and board or transportation. On the other hand, Distant Learning losses interaction with the other students is one of the advantages of it. Distant education is commonly one student in one teacher so only 2 of you are interacting with one another, or sometimes, communication is only one way where only the teacher is active in communicating. It is not easy to motivate if you are the only one or the only peer in the learning ground. It is also self-paced so it is less motivating. It is quite amazing that humans are able to deliberate this mode of learning. It sounded like cool to me in a sense that it involves or let’s say it is dependent of technology which is an asset when it comes to employment. It gives us an idea that education is truly for all for those who are willing to learn – – busy schedule or disabled, still allot their time and effort for studying. In part of the teachers, it will open new ways of learning and of course, employment and income will increase. This education will be in- demand especially to foreigners who want to speak in English and many more. When my professor once introduced distant education in the class, I was quite convinced to study in that way. If I learn the mechanics of Distant learning, I someday may become a teacher of distant education. I want to help students who are especially handicapped or something. It is a proof that education will be non-discriminating, and I hope this type of learning will continue to grow as they produce competent students.

Final 2 Essay Example | Topics and Well Written Essays - 1250 words

Final 2 - Essay Example That was then. So what about today? The world is at a risk of obliterating itself with the use of such energy to create dangerous weapons. This paper will examine some of the issues brought about by the use of nuclear energy in making nuclear weapons, and what this means to the world, in the foreseeable future. Question 1 One aspect of nuclear proliferation is the disregard for human life in the world. This is a risk to world peace because; many countries are involved in making nuclear weapons available thinking other countries are also doing so. Nuclear proliferation is enabling nuclear weapons to be available, the knowledge on nuclear energy, and the materials used to make them available. Countries are quick to find material that is likely to assist in making these weapons, but the sad part of all this is that, nobody is doing anything about it (Corera, 2006). Vast amounts of capital are used in the research and study of nuclear energy meant for building weapons, and yet, many coun tries elsewhere are battling with diseases and hunger. Moreover, nuclear proliferation is rampant because of mistrust among nations. Two nations known for battling openly over nuclear weapons are the United States of America, and Iran. Iran is involved in manufacturing nuclear munitions. America is assured of this fact. This thought warranted the invasion of a country in search of these weapons, which to this day, still remains an illusion. It is this mistrust that puts the whole world at risk as this hatred is likely to go global. In such a case, many nations will suffer (Corera, 2006). Claims that Israel is involved in nuclear weapon manufacture have been heard, but nobody is yet to invade the country in search of these weapons. Restrictions must be made to dissuade the use of nuclear material in any way. This may reduce nuclear proliferation over time. Question 2 Nations are likely to use nuclear weapons in the future because these weapons are indiscriminate and inhumane. They ha ve the capability of destroying everything in their wake, and in the case of war, the use of these weapons will be the first option. The rising tensions in many parts of the world have many individuals up in arms over the use of nuclear weapons to remedy the situation. These weapons are capable of eradicating the human race in a frighteningly short time. The problem with such tensions is that, nobody is willing to admit their involvement in such tendencies. This causes more tension, which further increases the chances of the use of nuclear weapons in the future (Corera, 2006). Another reason why countries are likely to turn to nuclear weapons in the future would be double standards between the first world nations. The U.S has policies against the use of nuclear weapons. However, the same country advocates for the use of nuclear energy (Corera, 2006). The use of nuclear energy is just an excuse to experiment on nuclear weapons. The two are tied together, hence; one cannot claim that the signing of a few terms of agreement can avoid the practice of nuclear armaments in the future. This is what has everyone antsy about the current situation in terms of nuclear weapons. Question 3 Western intelligence agencies are incapable of addressing nuclear threats adequately because of lack of jurisdiction (Corera, 2006). The only thing they can do at the moment is carry out surveillance, and voice

Epidemiology Assignment Example | Topics and Well Written Essays - 750 words

Epidemiology - Assignment Example It also discusses the three parts of the epidemiological triangle in a clear and outright way. Voigt explains various symptoms in the Hong Kong and SARS article. It is evident that the symptom common to all patients is a fever above 38 degrees Celsius. Some patients experience mild respiratory symptoms at the first stage, but later the cold experienced resembles influenza. Statistics shows that 10 percent to 20 percent of the patients have diarrhea. It is also apparent that SARS lead to either bacterial pneumonia or viral pneumonia. SARS was diagnosed in patients who had any of the symptoms. Also, SARS was suspected in patients who had contact with individuals who had been infected with SARS. One was advised to visit the health centers for diagnosis in the case where one had travelled to any of the regions identified by World Health Organization (WHO) as areas with prone to SARS (Voigt, 2013). Voigt also give statistics of the SARS epidemic as per the World Health Organization (WHO) report. The statistics showed that a total of 8,097 people worldwide became infected with SARS during the 2003 outbreak. The patients among these who died were 774. In considering the epidemiological triangle, the host of this epidemic was a farmer in Foshan county in the Guangdong province of china. He died soon after the infection, and there was no definite diagnosis done on his cause of death. The outbreak is believed to have been prone in November of 2002. The unfortunate thing is that the Peoples Republic of China (PRC) informed the World Health Organization (WHO) on February about the outbreak. The report they brought forward at that time showed 305 cases of infected individuals, and that there were 5 deaths caused by the epidemic (Voigt, 2013). Sars Legacy still felt in Hong Kong article shows that lack of openness by the government of china delayed the control effort to the SARS epidemic in the region and thus the disease spread at a high rate in the Guangdong

Economic and political integration in EU Essay Example | Topics and Well Written Essays - 2500 words

Economic and political integration in EU - Essay Example The first of course was the founding of the European Economic Union (EEU). The second was the witness of regime change; the emergence of a liberal substitute wherein the state was harnessed by a common economic rule. The third, thanks to globalisation, saw the revival of economic liberalism as a doctrine, and the fourth; saw during the final decade of the century, the integration process of states suffer a series of eventually correctable setbacks that still peril the Union (John Gillingham, p.xiii, Preface, 2003). The European Union is unique among international organisations, in that, it has a complex yet well developed system of law, directly affecting its member states. The EU constitutes a law that draws mutual social and economic benefit of the member states. European Union law has come a long way since its inception over the past 50 years. As of today, the EU has around 500 million citizens in 27 member states bound together by this law, making it one of the most encompassing and dynamic modern legal systems in the world (Wikipedia, 2007). It all started when, the heads of the member States of Belgium, Germany, France, Italy, Luxembourg, and Netherlands, agreed to lay the foundation of an ever closer union among the European Union members1. These included: The nature of the EC Treaty ensures that unelected individuals have had a greater impact on the development of EC Law than elected officials. This paper takes a look at three prominent laws that regulate the free movement of goods, people, and competition. 2.0 Executive Summary The free movement of persons between the Member States of the EU was at one time restricted to only the working class. This however changed with the economic development of all member states within the EU, and all people, citizens, students, dependents, and others who were no longer economically active were allowed to travel to any country in the EU and reside there if they wished. Since the integration of the

Buddhism Essay Example | Topics and Well Written Essays - 750 words - 13

Buddhism - Essay Example Atman can be seen as a particle of the universal soul (Brahman), which lives in each person. In turn, Buddhism denies such understanding of the soul and its varieties. Unlike Hinduism, Buddhism does not regard the human soul as an unchanging essence, because for Buddhism the soul is a flow of human experiences, feelings and sensations. Such an understanding seriously affects the idea of ​​rebirth that is represented in Hinduism and Buddhism: in Hinduism, reincarnation implies that the constant soul changes its body, while Buddhism focuses on the fact that it is about the rebirth of the soul, the resumption of its existence. Despite the contradiction between the different versions of Hinduism, they all share certain fundamental ideas (Whitman 608). According to the general Hindu notions, beyond the volatile physical world there is a single universal, unchanging, and eternal spirit called Brahman. The soul (Atman) of each being in the universe, including the gods, is a part of that spirit. In fact, â€Å"Hinduism believe in the existence of Atman, that is the individual soul and Brahman, the Supreme Creator† (Nandan and Jangubhai 30). The soul is regarded as an eternal and immutable essence, which has the opportunity to live after human death. When the flesh dies, the soul does not die, for it passes into another body, in which it has a new life. The fate of the soul in each new life depends on its behavior in previous incarnations. The law of karma says that no sin is left without punishment and no virtue - without reward; if a person has not received the deserved punishment or reward in this lif e, he/she will get them in one of the following. Human behavior determines the higher or lower status of the later incarnation (Nandan and Jangubhai 27). Though Buddhism and Hinduism share the concept of rebirth, the Buddhist concept differs in details from the Hindu one. The doctrine of rebirth presented in Hinduism involves a permanent soul, the essence of

Mortgage fraud Term Paper Example | Topics and Well Written Essays - 3000 words

Mortgage fraud - Term Paper Example This research will begin with the statement that the dream of owning a home is running away from reality due to the increase in the number mortgage frauds. Misguided real estate professionals and dishonesty homeowners are fleecing homeowners billions of dollars through mortgage scams. Mortgage fraud can be defined as the intentional misrepresentations, omissions to fund or secure a loan that is designed to acquire mortgage financing using fraudulent or stolen identification documents or false financial and income statements. Inflated real estate properties and high property taxes have made homeownership rarely accessible to the honest citizens. Statistics from the Federal Bureau of Investigation show that real estate fraud is the most rampant white –collar crime in the United States. From 2003-2004, mortgage fraud crime rates increased by 146% while during the period 2004-2005, the rate increased further by another 29%. According to industry figures, losses from real estate fr auds run in to millions of dollars annually in Canada. Most criminal groupings are responsible for the mortgage scams. Mortgages frauds leave individuals with high property taxes, inflated property prices and adverse credit histories. In Canada, mortgage fraud is mainly concentrated in Ontario and Alberta though some cases occur in other Cities. Combating mortgage fraud has not been possible since as soon a law is enacted, the con artists devise other loopholes in the real estate market which they use to defraud the homeowners. 4. The crime is becoming more sophisticated due to technological innovations which have made it easy for the criminal groups to obtain personal information like identification and financial statements through the internet. Majority of the financial institutions depend on automated systems to underwrite and value the property, to conduct financial strengths and capabilities of the borrower and to generate financial statements hence it is difficult for the lend er to detect the fraudulent and falsified financial statements5. Risk factors for mortgage frauds Political, social economic and technological advancements can impact on the magnitude of mortgage frauds. The competitive banking industry during periods of economic boom and the customer pressures for the mortgage interest rates have increased rates of mortgage crime. Financial institutions avoid losing commissions and fees thus they may not conduct due diligence in mortgage approvals6. Technological innovations such as the internet communications and e-commerce involve widespread exchange of personal information and identity documents over the internet. Criminals may fraudulently obtain personal information over the internet thus using it to defraud the customer or acquire mortgages fraudulently. Criminal gangs are also utilizing the internet to conduct their illegal activities since with modern communications individuals do not need to physically meet in order to conduct a business t ransaction7. Mortgage frauds mainly involve numerous players in the financial industry insiders. Vendors, lawyers, credit rating agencies and real estate agents and mortgage brokers knowingly give consent to the use of false financial statements or will conduct false appraisals of the financial strength of the purchaser. Fraud for property also occurs when dishonest lenders lead the borrowers to buying houses which they may not be able to service. The lenders assist the borrower to submit false financial statements, income and asset records8. Types of mortgage frauds There are numerous types of frauds involved in the real estate industry. The frauds range from undisclosed kickbacks to falsifying income and employment information. The first type of mortgage fraud is the occupancy fraud. The fraud occurs when the mortgage borrower anticipates acquiring an investment property and states in his or her loan application documents that the property will be a second home or the

Financial Analysis of Burberry Group Plc Coursework

Financial Analysis of Burberry Group Plc - Coursework Example In relation to the study the company which has been selected is Burberry Group Plc is a British luxury fashion house established in 1856 and listed on the London Stock Exchange since 2002. Its business’s mainline involves the sourcing, designing, manufacturing, and marketing of high-end clothing as well as non-apparel accessories for customer segments including women, men, and children. Customers can reach Burberry products through its diversified distribution network of retail, wholesale, digital and licensing channels operated in the United Kingdom and across the world. In the year 2012, Burberry was ranked the 82nd best global brand in the world with regards to its high operating value and such ranking has been improved for the past few years. Therefore, it is worth studying its financial information to see how its operation has developed causing increasing company’s value. For the purpose of carrying out a financial performance analysis of Burberry, the financial st atements of the company pertaining to the last three financial years have been reformulated (See Appendix). The reformulation of balance sheet reveals the net operating assets (NOA) of the company, net debt, and net equity. On the other hand, the reformulation of income statement has revealed the recurring items and non-recurring or exceptional items in the income statement of Burberry. The income statement has been reformulated in two ways, i.e. full reformulation and basic reformulation. The basic reformulation does not include exceptional or non-recurring items in the income statement, whereas in full reformulation, each and every time has been included in the reformulated income statement. The overall analysis of the income statement for Burberry pertaining to the last four financial years shows that the sales growth declined in 2010 in comparison with 2009, whereas the growth rate showed improvement on consistent basis in 2011 and 2012. The main reason behind this consistency in sales growth is considerable increase in the retail sales of the company in the last two years. In addition to this, as the company is also engaged in the wholesales, there is a insignificant increase in wholesales also noted, which has contributed to the growth in sales revenue to some extent. Reformulated Income Statement (Full) 2012 2011 2010 2009 (Sales growth based on previous financial year) 1.24 1.17 1.07 1.21 As per the reformulated income statement, common size income statements for full and basic income statements have been prepared. Common Sized Income Statement Based on Full Reformulation (Excludes Unusual Items

How to Write a Bad Essay Essay Example for Free

How to Write a Bad Essay Essay It is very easy to find any sort of information in the books or internet sites, which can be helpful for those students, who want to write a good essay. Our professors explain us how to organize our work on the essays, how to do a good research or how to create a clear thesis statement. From our friends or classmates we can get a good piece of advice on how to plan, reference and format our writing correctly. However, it is really very difficult to find some useful information for those students, who intend to write a really bad essay. There are no good books or articles, which can help or at least give some ideas for such students. That is why those students, who want to make their essays really bad and unusable, have to spend a lot of efforts and be very creative. In order to write a bad essay, the first and very important steps are to avoid looking for any relevant information and not to do any sort of academic research. It is recommended also not to visit any lectures and not to use any notes of the classmates on the subject. Second, for producing a bad essay it is absolutely essential to spend as less time as possible for your writing. It is good to start working on the essay right before the deadline: this will help you to avoid the temptation to go to a library, consult your professor or look for some reputable scholar sources. The third step is not to do any planning of the writing, especially not to write any outline or summary. The next step of producing a terrible essay is to avoid coming up with any idea or point of the writing. It is also important to keep away from answering the questions of the essay clearly and concisely. Instead, you can write down everything which is unrelated or is currently in your mind. The further step for those students, who want to write a terrible essay, is to be sure that it has no certain clear thesis statement or proper structure, as well as no such components as an introduction, body paragraphs and conclusion. The next essential step is not to be concerned about any plagiarism and stealing someone else’s ideas or thoughts for your essay. Usual â€Å"copy-paste† from an internet source, from a magazine or a book, incorporated into your writing without any citing or referencing, is one of the greatest ways to produce a bad essay. More to the point, it is essential to remember that a bad essay never has anything like a reference page or works cited page. At last, the next stage is to ignore any rules and standards of formatting and place your text randomly on the pages. Furthermore, for making your essay as worse as possible, it is crucial not to spend time for revising or re-reading your writing and ignore all possible rules of English grammar, errors, typos, run-on sentences and other imperfections. It is effective to use wrong words and numerous repetitions in the essay. As a final stage, it is very important not to allow any of your friends or classmates to help you and check out your essay for clarity and content. Finally, the very last idea is to print out your essay on dirty or used paper and be sure that it is late for submission. The majority of people are convinced that it is very easy to write a bad essay, because no special skills or talents are required. Nevertheless, taking into account everything mentioned above, it must be clear for every student that producing a bad writing is, actually, very hard and exhausting job. It takes a lot of attention and a lot of hard work, therefore, not everyone can complete this assignment successfully. In my opinion, writing a bad essay definitely takes more efforts than writing a good essay. Maybe that is why a great deal of students prefer not to get into a trouble and choose not to deal with bad essays. Therefore, I am sure that it is always safer, more interesting and challenging to write good, readable, clear, laconic and fully referenced essays. Works Cited: How to Write a Bad History Essay. Keele University. History School of Humanities. 19 Apr. 2008 http://www.keele.ac.uk/depts/hi/resources/Indexes/HowToWriteAGoodHistEssay.doc .

Motives of Bank Mergers and Acquisition

Motives of Bank Mergers and Acquisition Chapter One 1.0 Introduction Over the years, the world have witnessed growth and development in the business world and will still record a lot more due to rapid technological growth in recent times. Merger and Acquisitions (MA) has contributed immensely to the worldà ¢Ã¢â€š ¬Ã¢â€ž ¢s economic development and also helped indirectly to create stability in some industries in both developing and developed nations. A merger is usually the amalgamation of two or more companies running commercial activities. On the other hand, acquisition is where one company takes over another and the identity of the other company can be eradicated as it becomes part of a larger company. Most MAs between companies have occurred as a result of achieving economies of scale and penetrate into new markets. Many bank employees regard MA as a threat to their jobs as the period will record shareholders demand for reduction of workforce. It will also be problematic to execute Human resource management with, and the environment of MA due to t he changes that will be recorded in the procedures and practices in the new company. The vast majority of mergers acquisitions research is correctional and focuses on publicly traded corporate entities, using quantitative secondary data made available by large number of databases (Meglio and Risberg, 2010). Background to the Study A significant change has been witnessed in the Nigerian banking sector over the years, in respect to ownership structure, number of institutions and locations, as well as the profundity of operations. There are some numbers of effects when companies merge or when one company acquires another company (Cigola and Modesti, 2008). This include reduced expense in production and management cost, deriving It was observed that downsizing, mergers, and acquisitions are examples of the radical organizational responses to increase global completion, improvements in technology, and government deregulation (Shook and Roth, 2010). The changes so far recorded have been predisposed mostly by the challenges posed by issues as globalization, deregulation of the financial sector, and the implementation of a decision making and prudential requirements that are in line with international standards. This is why some companies may deliberately choose to merge with any other readily available in its line of business. The benefits in most cases are much more than the losses if any is recorded. Mergers have also had effects on employees as the process usually leads to an upward or downward review of wages and salaries. There are also cases where the MA leads to downsizing of workforce as new technological operation techniques will be adopted and there will be less needed for human resource compared to the former way of operation. Bank Mergers and Acquisition A significant amount of research has been done to ascertain the success rate of MAs in banks to be able to draw conclusion on its profitability and efficiency (Behr and Heid, 2011). It was pointed out that despite the considerable prospective U.S banking mergers in the 1980s; many of them were not successful in achieving their aim due to the cost of efficiency. Banks have diverse reasons why they merge which relates to the business motives behind it such as managerial incentives (Wood, 2006). The banking industry was partly strengthened through MA as they use the merged assets to build a strong capital base for the bank and more assets that have appreciated value. Soludo (2004) enumerated the fundamental problems of the banks, particularly those classified as unsound, have been identified to include; persistent illiquidity, poor assets quality and unprofitable operations and further mentioned that their major problems also included weak governance , weak capital base, late publicatio ns of annual reports, gross insider abuses and over dependence on public sector deposits. Many literatures indicates that banking sector reforms in Nigeria propelled by the need to deepen the financial sector and reposition for growth, to become integrated into the global financial design; and involve a banking sector that is consulting with regional integration requirement and international best practices (Somoye, 2010). Nigerian Banking Industry In the recent past, Nigerian banks have adopted poles apart strategies to achieve a predetermined least amount capital base during the banking sector consolidation in the year 2004 and 2005 which was put at twenty five billion Naira (Alao, 2010). This process saw a lot of banks in Nigeria to source for funds from all forms of businesses to meet up the demand and at a point, it was observed mergers or acquisition of smaller banks was the only way out of the regulation. MAs is a global phenomenon with an estimated four thousand deals taking place each year. Elumilade (2010) mentioned that banks are the linchpin of the economy of any country. He mentioned that banks in any every country play a vital position in respect to the countryà ¢Ã¢â€š ¬Ã¢â€ž ¢s financial system and they could be regarded as vital agents for development process. Banks also are relevant through financial intermediation services and promote economic growth (Afolabi, 2004). According to Ibru (2006), there was an embryonic phase of the Nigerian banking industry which began with the first set of banks started with the African banking corporation which had its headquarter in south Africa and was pioneering by the Nigerian banking system in 1892. In 1894 the British bank for West Africa which now known as the first bank while union bank of Nigeria plc formerly known as the Barclays D.C.O started in 1925. The British and French bank now united bank for Africa was established in 1949. Many other indigenous banks were established and they ushered in the era that saw the constant monopoly erstwhile enjoyed by the foreign owned banks (CBN, 2008) Central Bank of Nigeria and Market Recapitalization The Central Bank of Nigeria (CBN) in 2004 introduced a policy that made it mandatory for recapitalization to be carried out in the banking industry. This was mentioned as the fourth phase of the banks restructuring scheme and all banks should comply strictly before the end of 2005 (Afolabi, 2004). This led the emergence of twenty five consolidated banks and the process encouraged mergers and acquisition in many cases. They were 89 members of the Nigerian banking industry (NBI) prior to the recapitalization. It was recorded that the CBN in 2009 provided two hundred billion Naira to four undercapitalized banks after an audit was carried out which reported that they could face liquidity problems and needed funds to continue normal operations. In addition, the CBN decided to stabilize the system and return confidence to the markets and investors, an addition injection of six hundred and twenty billion naira of liquidity into the banking sector and there is a replacement of leadership in eight banks which has given sector a little more balanced than its formal position (Sanusi, 2010). Relevance of the Research After the bank consolidation in 2005, it was mentioned in a CBN report that UBA Plc and First Bank of Nigeria have been effectively competing with multinationals in various aspects of international business. CBN Report (2007) also revealed that some Nigerian banks after the consolidation were able to register their presence in the developed countries like United States of America and United Kingdom as participate in foreign market areas of funds transfer and loans servicing. Mergers and acquisitions have for long attracted interest of many researchers in academics in trying to predict the outcomes of the deals (Meglio and Risberg, 2010). They further explained that the inconsistency in some research findings has necessitated the need for more integrative frameworks to grasp the complete phenomenon. Also, the researchersà ¢Ã¢â€š ¬Ã¢â€ž ¢ opinion aiming to explain mergers and acquisition outcomes in general have not been able to successfully develop and test a grand theory about MAs. Aim of the Study This research aims to look into the overall motives of banks mergers and acquisition as well as its impact on the Nigerian economy. Research Questions and Objectives Research Questions What are the implications of bank mergers and acquisition? What are the motives behind bank merger and acquisition? How does merger and acquisition impact on efficiency? How can merger and acquisition effect competition in the Nigerian banking sector? Research Objectives To critically evaluate mergers and acquisition in the banking sector To analyse the impact of merger and acquisition in the Nigerian banking sector To evaluate the success of UBA merger and acquisition To identify the success factors of UBA in Nigeria Banking sector Plan of the study The plan of this work has been structured to begin by providing a background of the area under discussion and justifying the need for the study in the first chapter. This would be immediate followed by review of literatures relating to similar issues and traditional views of mergers and acquisition in chapter two. The research method which will highlight how I intend to gather data will be presented in the third chapter. The data analysis and findings will be presented and discussed in chapters four which will be followed by the summary, conclusion and recommendation in chapter five. Summary This chapter gives an insight into the subject matter by examining the different related aspects of the subject that will contribute to the major focus of the other chapters. It is a known fact that MA has positive and negative impacts in any sector or environment where it has occurred and this will give us the opportunity to draw the impact of competition that will bring in the absence of a monopoly situation. Chapter Two Literature Review Recent studies show that the bank recapitalization process that took place in Nigeria in 2005 has been of great importance to the sector. Merger and acquisition across the world have had positive impact in the strength of the firm in most cases. The banking sector in Nigeria across the world has had course to experience MA in some cases and this helped them in restricting in various forms. The UBA merger with STB was a success as the experience of the first generation bank and agility of a new generation bank was put together to produce a stronger UBA Plc. History of Mergers and Acquisitions MA history time and again have surprises many people when they realise that the concept of MA are not new, and on the converse they are progressing from the early years. It helps us to understand the evolution of the concepts in the world. The economic watch (2011) mentioned that there are five major stages of MA which discussed as wave period. Each of these waves recorded its progress associated with it and has a technological support that gave rise to the era. Past experience has also shown that MA are triggered by economic factors. The period between (1897 1904) saw a lot of horizontal mergers as companies which enjoyed monopolistic competition over their area of production such as electricity and transcontinental railroads merging with others in same area. It mainly occurred between heavy manufacturing industries at that time. A lot of mergers failed towards the end of this phase as they could not get the desired efficiency and the state of world economy as at 1903 as well as th e stock market crash on 1904 did not help matters. Chu (2010) reflected to the mergers in Canadian banks in 1889 to 1926 which could be referred to as both the first and second wave period. He explained that economist has not fully explored the mechanisms through which financial developments affects economic growths. Canadaà ¢Ã¢â€š ¬Ã¢â€ž ¢s growth trough MA under the period was under study was also associated with higher banking concentration and a wider branch network. Kling (2006) also agreed that the German universal system emerged around 1914 as the big banks in Berlin acquired smaller banks. This development supported industrial enterprise and external growth through industrial enterprise. The second wave or MA was recorded between 1916 and 1929 which were more between oligopolies as that of monopolies in the first era. The post world war economic boom after the First World War supported these mergers. Also, government policies as at that time started to encouraged companies to work together and technological innovation in areas of transportation provided the needed for such MA. Most of the mergers at this time were mainly horizontal or conglomerate in nature. Producers of key metals, petroleum products, food products, chemicals and transport equipments were mainly involved in the mergers of this period. Investment also supported very in merger as at the period but the great depression of 1929 and the stock market crash in same year brought period to an end. There were mainly conglomerate mergers as at 1965 to 1969 which was stimulated by sky-scraping stock prices, interest rates, and stringent enforcement of antitrust law in the third wave merger. This period did not end well as government were becoming too harsh towards them end of the period but a few companies did well in the 1970s. The fourth merger wave was within 1981 to 1989 recorded mergers in some industries such as airline, banking, oil and gas and pharmaceutical. There many cases of foreign takeovers and the period ended with anti takeover laws, reforms in financial institution and the gulf war. Kim and white (1998) analyzed almost all commercial banks mergers in the united states between 1985 and 1991, and found out evidence of decreasing cost efficiencies in most mergers, except for mergers between very large financial institutions. The small and medium commercial banks decreased efficiencies after merger. Globalization, stock market boom and deregulation in the telecommunication, banking and petroleum industries were major characteristics of the fifth merger. Most of the mergers at this time were geared towards profit maximization but the burst of the stock bubble also ended this era. Huyghebaert and Luypaert (2009) states that in the year 2007 alone, there almost forty thousand deals announced in respect mergers and acquisitions across the world. This accounted for an aggregate value deal value of one thousand, three hundred and forty-five billion dollars. Ernst and Young (1995) also identified the alternatives of acquisition: financial, geographic, and symbiotic and absorption acquisitions. In the case of financial is where a company is bought into a holding company for the purpose of restructuring. The main objectives for the acquisition are mainly to eradication, reduce cost and improved efficiency. There are so many firms with ideas to change the world of business but lack the financial muscle to improve in research and development and or invest more into the existing findings. Any business speculator that gets hold of this will ensure that these ideas see the light of the day by an outright acquisition so as to finance the company for growth. Geographic acquisitions are intended to expand the acquirerà ¢Ã¢â€š ¬Ã¢â€ž ¢s core business across new frontiers. The term emerging markets rings a bell in business as every investor want to sell products and services where there is a ready market with a thriving huge population. In the rece nt years, most businesses have moved their production sites to Asia where there cheap labour and n emerging market for the product. Some parts of Africa where there reasonable levels of stability have also seen to be good to expand into as a new frontier. The sales of mobile phone handsets the Nigerian market could be seen as a good example a new frontier for Chinese or Japanese phone manufacturers. Companies merge with others in a different location just to get access to the new location as well. Symbolic acquisitions are described as where newly acquired products and competencies are absorbed into the parents business but the acquired company retains a level of independence, absorption acquisition imply that the two businesses are fully integrated, with one effectively loosing identity. This is an effective business strategy as the name of the former company is like an asset and most customers may not continue with the product or services if the name is changed. The case of Tata acquiring land rover in 2009 is a suitable case where the name Tata is known for production of trucks and military vehicles, but land rover is known for luxury cars and as such the change of the name perceived with strength should remain to keep the market moving smooth. The case of absorption acquisition as mentioned before where one companies gradually losses identity could be seen in the case if Safeway supermarket and Morrisonà ¢Ã¢â€š ¬Ã¢â€ž ¢s supermarket where Safeway gradually faded away. Chen and Tan (2011) examined how the deregulation of financial services industry has intensified in some European countries a significant portion of business handled by banks. This is because the deregulated banks have more financial capacity to manage and finance businesses with a confidence of measuring up at the end of the day. There were two hundred and thirteen mergers during 1989 to 2004 with the acquirer of a European bank and the target of an insurance company. This was because the growth and success rate of mergers was lucidly clear to business world at time, in that firms were on the lookout for a similar thriving company that they could merge resource and ideas together to achieve economies of scale and reduced overhead cost. Koetter (2007) was of the view that prior to the merger targets perform poorly compared to acquirers in many merger cases. The increasing efficiency of a firm reduces the hazards of takeovers but increases the risk if bank failures. Therefore, the probability of takeovers and failures is influence significantly by efficiency. Imala (2005) identified eight reasons for merger and acquisitions in the financial service sector. The identified reason are in relation cost savings attributed to economies of scale as well as more efficient allocation of resources; revenue enhancement which is derived from the impact of consolidation on bank size, scope, and overall market power; risk reduction due to change in organisational focus and efficient organizational structure; new development which imposes a high fixed cost and need to spread these costs across a large customer base; the advent of deregulation which removed many important legal and regulatory barriers; globalisation which engender a more globally integrated financial service and geographical expansion of banking operations; financial stability characterised by the smooth functioning of various components of the financial system, with each component resilient to shock; shareholders pressure on management to improve profit margins and returns on investment made possibly by new and powerful shareholders blocks. Nigerian Banking Environment According to Adegbaju (2007), there have been remarkable developments in the Nigerian banking sector over the years. Mergers and acquisition in Nigerian banks to took place in 2004 / 2005 commenced after an announcement by the CBN that all commercial banks in Nigeria should upgrade their minimum capital base too twenty five billion Naira before the end of December 2005. Umoren, (2009) examined the benefits of the fortification and consolidation of the Nigerian banking system as it could be seen as the first phase where by such reforms are made to help to guarantee a well built and reliable banking sector that is also considered to be diversified to ensure depositors safety. The role of money in the development of any nation cannot be over emphasized and the Nigerian economy needs to be capable and competitive in the African continent particular as well as the world in general. Madabueze (2008) mentioned that the recent reforms in Nigeria banking sector which required the banks to source for high capital base to the tune of twenty five billion naira which is put at approximately one hundred and ninety million dollars, recorded a sharp drop down of the number of banks from eighty-nine to less than twenty-four currently in operation. He further argued that this will enable the Nigerian banks to become relevant and active players in the international scene, helping the image of Nigeria as a financial capital of some sort of (china of Africa). The Nigerian economic policy was regarded as an economically fragile policy some decades before then but the recapitalization process has enable two recent developments which is a positive message to the international community. The CBN governor at that time, prof. Charles Soludo explained that before the recapitalization commenced, the Nigerian banks have not played their role in economic development because of their fee ble and frail capital base and as such, there was a great need to strengthen them through the consolidation process. Madabueze (2007) opined that the crusade requesting the CBN to be flexible with their position of recapitalization did not involve bankers alone as members of the national assembly in Nigeria also requested the CBN to reverse its decision of recapitalization to the amount twenty five billion naira. Is was further observed as he mentioned that members of the public were completely against the move as they felt the process will worsen the situation and many of them started making panic withdrawals from their accounts. On the other hand, the CBN also had its fair supporters which included the former president of the federal republic of Nigeria, Olusegun Obasanjo who publicly showed his support for the twenty five billion capital base for banks, the Manufacturers association of Nigeria (MAN) who were completely in support of the policy claiming that it will enlarge the national economic base and help to position the real sector. Ogundele (2008) agreed that mergers are essentially the amalgamation of two or more companies that of all or the parties must be in existence legally and the surviving company continues to function in its originally registered name. In some case, merged companies find themselves out of business and leave its assets and liabilities to the acquiring company. Williams and Rao (2006) focus on mergers and acquisition because they are events that correspond to considerable changes in the asset structure of the bank. Commercial bank faces different risk, capital structure and regulatory environments as against firms that have been traditionally studied for governance effects and managerial risk aversion. Owokalade (2006) observed the definition of mergers as posited by the company and allied matters act decree of 1990 that any amalgamation of the undertakings of two or more companies or the undertaking of two or more companies and one or more bodies corporate. He emphasized that a form of dealings combination whereby two or more companies join collectively to become one; being voluntary liquidated by having it interest taken by the other and its shareholders becoming shareholders in the blown up existing company. Kurfi (2010) is of the view that mergers as a principle of the combination of two or more companies that translate same business purposes and agree to come together and decide whichever the given name of one of the companies or absolutely take a new name. He further mentioned that amalgamation is another word for merger. Mergers usually occur between firms of almost same size and are usually friendly. In the case of Stanbic bank and IBTC bank, they arrive at a name StanbicIBTC bank plc after their merger and the resultant name was due to the friendship earlier involved and almost same size of the banks. Kazmi (2006) grouped merger into four: horizontal, vertical concentric and conglomerate mergers. Further explanation revealed that horizontal mergers takes place where there is a combination of two or more firms in the same business, or an organisation engaged in certain aspects of the production and marketing process. When there is a merger of two or more firms but necessary in the same business which might be complementary in supply of materials or marketing is referred to as a vertical merger. The concentric merger takes place when there is a combination of two or more firms related to each other in line of function, customer group or alternative technologies used. Conglomerate merger occurs when there is a combination of two or more firms that are unrelated in customer function, customer group, and alternative technologies. There are situations where a company gets involved in all the above listed forms of mergers. For example, HP a computer and printers giant has merged with Com paq recently and before then acquire Apollo computers which related, acquired Agilent technologies which were into chemicals and medical business, acquired Mercury Interactive which was a software company. The UBA Merger Mergers and acquisition is simply a different approach encourage survival of the fittest is to give rise to a stronger, more efficient, better structure and skilled industry. The Guardian Newspaper reported in 2005 the UBA merger started with separate meetings where that boards of directors of UBA and Standard Trust Bank Plc accepted the arrangement for a union of both financial institutions. The bank aimed to become the biggest bank in West African and one of the largest in Africa. When they considered the assets of both banks before the merger, it was observed that had a formidable asset base after accessing their portfolios at that time and when is been concretised, they could customers from all sectors of the economy. It has over 100 branches spread out strategically across the country in what is described as the largest truly online real-time banking network in sub-Saharan Africa. It is often referred to as Nigerias neighbourhood bank. This derives from its national orientation in terms of geographic spread and continuing national expansion. Wheelen and Hunger (2008) confirmed that UBA the former Trade bank and Citi express bank because the firms were different in sizes and as such they can either be friendly or hostile. Todayà ¢Ã¢â€š ¬Ã¢â€ž ¢s UBA is a merger between two predecessors banks, legacy UBA and Standard Trust Bank (STB) which were ranked third and fifth in size respectively prior to the 2005 CBN reform and consolidation programme. It was a huge success as the ability to anticipate industry trends, coupled with the banks agility, enabled them to be the first successful merger in the history of Nigerian banking industry, thus creating the current UBA plc which its management rates as the largest financial services institution on West Africa. As the economies of Nigeria and Africa continues to improve, following the established path of the emerging market; i.e. increased political stability, improved government finances, growing domestic consumer demand, high commodity prices and significant improvement in the economic indicators, the UBA is well positioned as a warrant on the African renaissance story. The presence of UBA in all commercial centres and major cities in Nigeria and Ghana has earned the bank the nickname: the neighbourhood bank. This appellation ties in with the UBA brand promise. à ¢Ã¢â€š ¬Ã…“The wise choiceà ¢Ã¢â€š ¬? and guides our retail distribution strategy which enable us to deliver exactly should be expected by both potential and existing customers of the bank in respect to proximity, choice, convenience and customization. UBA is a bank that is operating out of two of the most vibrant economies in the sub region; Nigeria and Ghana, the new |UBA combines the financial strength of fifty-seven year UBA and the young , innovative and technology driven dynamism of the then STB. UBA has maintained a consistent and solid financial performance in its forty-five year history since it began business in 1961. The bank has record history of leading and pioneering innovations in Nigerian financial sector. It is the first ever and only Nigerian bank to surpass the one trillion balance sheet size with contingents inclusive. It is the only sub-Saharan African bank excluding republic of South Africa that has a branch in New York, USA. UBA was ranked the number one bank in Nigeria in 2007, and bank of the year award (Thisday, 2007). This was due to the banks outstanding performance in the banking sector. Euromoney (2000) confirmed that UBA was the best domestic bank in Nigeria and was the first among international banks to be registered under Nigerian law. The bank has received excellence credit ratings both short and long term, global credit rating (SA) AA+ and A+ in 2005.UBA is the first Nigerian bank to offer an IPO following its listing on the Nigerian stock exchange in 1970. UBA was the first Nigerian bank to introduce a Cheque Guarantee Scheme known as the UBACARD in 1986. It was the first bank to introduce the Nigerian Government Bond index in 2006. It was also the only Nigerian company with the GDR programme. The GDR is a negotiable certificate representing ownership of shares. They are quoted and traded in US dollars and the dividends are paid in same currency. It is specially designed to facilitate the purchase, holding and sale of non US securities by foreign investor. This GDR programme enables foreign institutional investors to hold and trade UBA shares without having to expatriate funds into Nigeria. This Depositary Receipt (GDR) is preferred by some investors who are unable to hold Nigerian securities for compliance reasons or due to a lack of the appropriate infrastructure for holding an ordinary share. The GDR also trade, clear and settle according to international market conventions rather than those prevalent in Nigeria (UBA Report, 2008) West Africa and indeed everywhere the bank has presence. It is simple, elegant, vibrant and memorable, combining the mustard seed of legacy STB and the typographic execution of the letters UBA, predominantly in red and white. During the period of the former standard trust bank plc (STB Plc) acquired 27.34% of the United Bank for Africa Plc (UBA plc) and this transaction resulted not a merger between the two banks, whereby all assets and liabilities of standard trust bank Plc were transferred to UBA Plc. The entire share capital of STB was cancelled and STB was dissolved without being wound up and the shareholders of STB were allotted UBA shares. Motives of Bank Mergers and Acquisition Motives of Bank Mergers and Acquisition Chapter One 1.0 Introduction Over the years, the world have witnessed growth and development in the business world and will still record a lot more due to rapid technological growth in recent times. Merger and Acquisitions (MA) has contributed immensely to the worldà ¢Ã¢â€š ¬Ã¢â€ž ¢s economic development and also helped indirectly to create stability in some industries in both developing and developed nations. A merger is usually the amalgamation of two or more companies running commercial activities. On the other hand, acquisition is where one company takes over another and the identity of the other company can be eradicated as it becomes part of a larger company. Most MAs between companies have occurred as a result of achieving economies of scale and penetrate into new markets. Many bank employees regard MA as a threat to their jobs as the period will record shareholders demand for reduction of workforce. It will also be problematic to execute Human resource management with, and the environment of MA due to t he changes that will be recorded in the procedures and practices in the new company. The vast majority of mergers acquisitions research is correctional and focuses on publicly traded corporate entities, using quantitative secondary data made available by large number of databases (Meglio and Risberg, 2010). Background to the Study A significant change has been witnessed in the Nigerian banking sector over the years, in respect to ownership structure, number of institutions and locations, as well as the profundity of operations. There are some numbers of effects when companies merge or when one company acquires another company (Cigola and Modesti, 2008). This include reduced expense in production and management cost, deriving It was observed that downsizing, mergers, and acquisitions are examples of the radical organizational responses to increase global completion, improvements in technology, and government deregulation (Shook and Roth, 2010). The changes so far recorded have been predisposed mostly by the challenges posed by issues as globalization, deregulation of the financial sector, and the implementation of a decision making and prudential requirements that are in line with international standards. This is why some companies may deliberately choose to merge with any other readily available in its line of business. The benefits in most cases are much more than the losses if any is recorded. Mergers have also had effects on employees as the process usually leads to an upward or downward review of wages and salaries. There are also cases where the MA leads to downsizing of workforce as new technological operation techniques will be adopted and there will be less needed for human resource compared to the former way of operation. Bank Mergers and Acquisition A significant amount of research has been done to ascertain the success rate of MAs in banks to be able to draw conclusion on its profitability and efficiency (Behr and Heid, 2011). It was pointed out that despite the considerable prospective U.S banking mergers in the 1980s; many of them were not successful in achieving their aim due to the cost of efficiency. Banks have diverse reasons why they merge which relates to the business motives behind it such as managerial incentives (Wood, 2006). The banking industry was partly strengthened through MA as they use the merged assets to build a strong capital base for the bank and more assets that have appreciated value. Soludo (2004) enumerated the fundamental problems of the banks, particularly those classified as unsound, have been identified to include; persistent illiquidity, poor assets quality and unprofitable operations and further mentioned that their major problems also included weak governance , weak capital base, late publicatio ns of annual reports, gross insider abuses and over dependence on public sector deposits. Many literatures indicates that banking sector reforms in Nigeria propelled by the need to deepen the financial sector and reposition for growth, to become integrated into the global financial design; and involve a banking sector that is consulting with regional integration requirement and international best practices (Somoye, 2010). Nigerian Banking Industry In the recent past, Nigerian banks have adopted poles apart strategies to achieve a predetermined least amount capital base during the banking sector consolidation in the year 2004 and 2005 which was put at twenty five billion Naira (Alao, 2010). This process saw a lot of banks in Nigeria to source for funds from all forms of businesses to meet up the demand and at a point, it was observed mergers or acquisition of smaller banks was the only way out of the regulation. MAs is a global phenomenon with an estimated four thousand deals taking place each year. Elumilade (2010) mentioned that banks are the linchpin of the economy of any country. He mentioned that banks in any every country play a vital position in respect to the countryà ¢Ã¢â€š ¬Ã¢â€ž ¢s financial system and they could be regarded as vital agents for development process. Banks also are relevant through financial intermediation services and promote economic growth (Afolabi, 2004). According to Ibru (2006), there was an embryonic phase of the Nigerian banking industry which began with the first set of banks started with the African banking corporation which had its headquarter in south Africa and was pioneering by the Nigerian banking system in 1892. In 1894 the British bank for West Africa which now known as the first bank while union bank of Nigeria plc formerly known as the Barclays D.C.O started in 1925. The British and French bank now united bank for Africa was established in 1949. Many other indigenous banks were established and they ushered in the era that saw the constant monopoly erstwhile enjoyed by the foreign owned banks (CBN, 2008) Central Bank of Nigeria and Market Recapitalization The Central Bank of Nigeria (CBN) in 2004 introduced a policy that made it mandatory for recapitalization to be carried out in the banking industry. This was mentioned as the fourth phase of the banks restructuring scheme and all banks should comply strictly before the end of 2005 (Afolabi, 2004). This led the emergence of twenty five consolidated banks and the process encouraged mergers and acquisition in many cases. They were 89 members of the Nigerian banking industry (NBI) prior to the recapitalization. It was recorded that the CBN in 2009 provided two hundred billion Naira to four undercapitalized banks after an audit was carried out which reported that they could face liquidity problems and needed funds to continue normal operations. In addition, the CBN decided to stabilize the system and return confidence to the markets and investors, an addition injection of six hundred and twenty billion naira of liquidity into the banking sector and there is a replacement of leadership in eight banks which has given sector a little more balanced than its formal position (Sanusi, 2010). Relevance of the Research After the bank consolidation in 2005, it was mentioned in a CBN report that UBA Plc and First Bank of Nigeria have been effectively competing with multinationals in various aspects of international business. CBN Report (2007) also revealed that some Nigerian banks after the consolidation were able to register their presence in the developed countries like United States of America and United Kingdom as participate in foreign market areas of funds transfer and loans servicing. Mergers and acquisitions have for long attracted interest of many researchers in academics in trying to predict the outcomes of the deals (Meglio and Risberg, 2010). They further explained that the inconsistency in some research findings has necessitated the need for more integrative frameworks to grasp the complete phenomenon. Also, the researchersà ¢Ã¢â€š ¬Ã¢â€ž ¢ opinion aiming to explain mergers and acquisition outcomes in general have not been able to successfully develop and test a grand theory about MAs. Aim of the Study This research aims to look into the overall motives of banks mergers and acquisition as well as its impact on the Nigerian economy. Research Questions and Objectives Research Questions What are the implications of bank mergers and acquisition? What are the motives behind bank merger and acquisition? How does merger and acquisition impact on efficiency? How can merger and acquisition effect competition in the Nigerian banking sector? Research Objectives To critically evaluate mergers and acquisition in the banking sector To analyse the impact of merger and acquisition in the Nigerian banking sector To evaluate the success of UBA merger and acquisition To identify the success factors of UBA in Nigeria Banking sector Plan of the study The plan of this work has been structured to begin by providing a background of the area under discussion and justifying the need for the study in the first chapter. This would be immediate followed by review of literatures relating to similar issues and traditional views of mergers and acquisition in chapter two. The research method which will highlight how I intend to gather data will be presented in the third chapter. The data analysis and findings will be presented and discussed in chapters four which will be followed by the summary, conclusion and recommendation in chapter five. Summary This chapter gives an insight into the subject matter by examining the different related aspects of the subject that will contribute to the major focus of the other chapters. It is a known fact that MA has positive and negative impacts in any sector or environment where it has occurred and this will give us the opportunity to draw the impact of competition that will bring in the absence of a monopoly situation. Chapter Two Literature Review Recent studies show that the bank recapitalization process that took place in Nigeria in 2005 has been of great importance to the sector. Merger and acquisition across the world have had positive impact in the strength of the firm in most cases. The banking sector in Nigeria across the world has had course to experience MA in some cases and this helped them in restricting in various forms. The UBA merger with STB was a success as the experience of the first generation bank and agility of a new generation bank was put together to produce a stronger UBA Plc. History of Mergers and Acquisitions MA history time and again have surprises many people when they realise that the concept of MA are not new, and on the converse they are progressing from the early years. It helps us to understand the evolution of the concepts in the world. The economic watch (2011) mentioned that there are five major stages of MA which discussed as wave period. Each of these waves recorded its progress associated with it and has a technological support that gave rise to the era. Past experience has also shown that MA are triggered by economic factors. The period between (1897 1904) saw a lot of horizontal mergers as companies which enjoyed monopolistic competition over their area of production such as electricity and transcontinental railroads merging with others in same area. It mainly occurred between heavy manufacturing industries at that time. A lot of mergers failed towards the end of this phase as they could not get the desired efficiency and the state of world economy as at 1903 as well as th e stock market crash on 1904 did not help matters. Chu (2010) reflected to the mergers in Canadian banks in 1889 to 1926 which could be referred to as both the first and second wave period. He explained that economist has not fully explored the mechanisms through which financial developments affects economic growths. Canadaà ¢Ã¢â€š ¬Ã¢â€ž ¢s growth trough MA under the period was under study was also associated with higher banking concentration and a wider branch network. Kling (2006) also agreed that the German universal system emerged around 1914 as the big banks in Berlin acquired smaller banks. This development supported industrial enterprise and external growth through industrial enterprise. The second wave or MA was recorded between 1916 and 1929 which were more between oligopolies as that of monopolies in the first era. The post world war economic boom after the First World War supported these mergers. Also, government policies as at that time started to encouraged companies to work together and technological innovation in areas of transportation provided the needed for such MA. Most of the mergers at this time were mainly horizontal or conglomerate in nature. Producers of key metals, petroleum products, food products, chemicals and transport equipments were mainly involved in the mergers of this period. Investment also supported very in merger as at the period but the great depression of 1929 and the stock market crash in same year brought period to an end. There were mainly conglomerate mergers as at 1965 to 1969 which was stimulated by sky-scraping stock prices, interest rates, and stringent enforcement of antitrust law in the third wave merger. This period did not end well as government were becoming too harsh towards them end of the period but a few companies did well in the 1970s. The fourth merger wave was within 1981 to 1989 recorded mergers in some industries such as airline, banking, oil and gas and pharmaceutical. There many cases of foreign takeovers and the period ended with anti takeover laws, reforms in financial institution and the gulf war. Kim and white (1998) analyzed almost all commercial banks mergers in the united states between 1985 and 1991, and found out evidence of decreasing cost efficiencies in most mergers, except for mergers between very large financial institutions. The small and medium commercial banks decreased efficiencies after merger. Globalization, stock market boom and deregulation in the telecommunication, banking and petroleum industries were major characteristics of the fifth merger. Most of the mergers at this time were geared towards profit maximization but the burst of the stock bubble also ended this era. Huyghebaert and Luypaert (2009) states that in the year 2007 alone, there almost forty thousand deals announced in respect mergers and acquisitions across the world. This accounted for an aggregate value deal value of one thousand, three hundred and forty-five billion dollars. Ernst and Young (1995) also identified the alternatives of acquisition: financial, geographic, and symbiotic and absorption acquisitions. In the case of financial is where a company is bought into a holding company for the purpose of restructuring. The main objectives for the acquisition are mainly to eradication, reduce cost and improved efficiency. There are so many firms with ideas to change the world of business but lack the financial muscle to improve in research and development and or invest more into the existing findings. Any business speculator that gets hold of this will ensure that these ideas see the light of the day by an outright acquisition so as to finance the company for growth. Geographic acquisitions are intended to expand the acquirerà ¢Ã¢â€š ¬Ã¢â€ž ¢s core business across new frontiers. The term emerging markets rings a bell in business as every investor want to sell products and services where there is a ready market with a thriving huge population. In the rece nt years, most businesses have moved their production sites to Asia where there cheap labour and n emerging market for the product. Some parts of Africa where there reasonable levels of stability have also seen to be good to expand into as a new frontier. The sales of mobile phone handsets the Nigerian market could be seen as a good example a new frontier for Chinese or Japanese phone manufacturers. Companies merge with others in a different location just to get access to the new location as well. Symbolic acquisitions are described as where newly acquired products and competencies are absorbed into the parents business but the acquired company retains a level of independence, absorption acquisition imply that the two businesses are fully integrated, with one effectively loosing identity. This is an effective business strategy as the name of the former company is like an asset and most customers may not continue with the product or services if the name is changed. The case of Tata acquiring land rover in 2009 is a suitable case where the name Tata is known for production of trucks and military vehicles, but land rover is known for luxury cars and as such the change of the name perceived with strength should remain to keep the market moving smooth. The case of absorption acquisition as mentioned before where one companies gradually losses identity could be seen in the case if Safeway supermarket and Morrisonà ¢Ã¢â€š ¬Ã¢â€ž ¢s supermarket where Safeway gradually faded away. Chen and Tan (2011) examined how the deregulation of financial services industry has intensified in some European countries a significant portion of business handled by banks. This is because the deregulated banks have more financial capacity to manage and finance businesses with a confidence of measuring up at the end of the day. There were two hundred and thirteen mergers during 1989 to 2004 with the acquirer of a European bank and the target of an insurance company. This was because the growth and success rate of mergers was lucidly clear to business world at time, in that firms were on the lookout for a similar thriving company that they could merge resource and ideas together to achieve economies of scale and reduced overhead cost. Koetter (2007) was of the view that prior to the merger targets perform poorly compared to acquirers in many merger cases. The increasing efficiency of a firm reduces the hazards of takeovers but increases the risk if bank failures. Therefore, the probability of takeovers and failures is influence significantly by efficiency. Imala (2005) identified eight reasons for merger and acquisitions in the financial service sector. The identified reason are in relation cost savings attributed to economies of scale as well as more efficient allocation of resources; revenue enhancement which is derived from the impact of consolidation on bank size, scope, and overall market power; risk reduction due to change in organisational focus and efficient organizational structure; new development which imposes a high fixed cost and need to spread these costs across a large customer base; the advent of deregulation which removed many important legal and regulatory barriers; globalisation which engender a more globally integrated financial service and geographical expansion of banking operations; financial stability characterised by the smooth functioning of various components of the financial system, with each component resilient to shock; shareholders pressure on management to improve profit margins and returns on investment made possibly by new and powerful shareholders blocks. Nigerian Banking Environment According to Adegbaju (2007), there have been remarkable developments in the Nigerian banking sector over the years. Mergers and acquisition in Nigerian banks to took place in 2004 / 2005 commenced after an announcement by the CBN that all commercial banks in Nigeria should upgrade their minimum capital base too twenty five billion Naira before the end of December 2005. Umoren, (2009) examined the benefits of the fortification and consolidation of the Nigerian banking system as it could be seen as the first phase where by such reforms are made to help to guarantee a well built and reliable banking sector that is also considered to be diversified to ensure depositors safety. The role of money in the development of any nation cannot be over emphasized and the Nigerian economy needs to be capable and competitive in the African continent particular as well as the world in general. Madabueze (2008) mentioned that the recent reforms in Nigeria banking sector which required the banks to source for high capital base to the tune of twenty five billion naira which is put at approximately one hundred and ninety million dollars, recorded a sharp drop down of the number of banks from eighty-nine to less than twenty-four currently in operation. He further argued that this will enable the Nigerian banks to become relevant and active players in the international scene, helping the image of Nigeria as a financial capital of some sort of (china of Africa). The Nigerian economic policy was regarded as an economically fragile policy some decades before then but the recapitalization process has enable two recent developments which is a positive message to the international community. The CBN governor at that time, prof. Charles Soludo explained that before the recapitalization commenced, the Nigerian banks have not played their role in economic development because of their fee ble and frail capital base and as such, there was a great need to strengthen them through the consolidation process. Madabueze (2007) opined that the crusade requesting the CBN to be flexible with their position of recapitalization did not involve bankers alone as members of the national assembly in Nigeria also requested the CBN to reverse its decision of recapitalization to the amount twenty five billion naira. Is was further observed as he mentioned that members of the public were completely against the move as they felt the process will worsen the situation and many of them started making panic withdrawals from their accounts. On the other hand, the CBN also had its fair supporters which included the former president of the federal republic of Nigeria, Olusegun Obasanjo who publicly showed his support for the twenty five billion capital base for banks, the Manufacturers association of Nigeria (MAN) who were completely in support of the policy claiming that it will enlarge the national economic base and help to position the real sector. Ogundele (2008) agreed that mergers are essentially the amalgamation of two or more companies that of all or the parties must be in existence legally and the surviving company continues to function in its originally registered name. In some case, merged companies find themselves out of business and leave its assets and liabilities to the acquiring company. Williams and Rao (2006) focus on mergers and acquisition because they are events that correspond to considerable changes in the asset structure of the bank. Commercial bank faces different risk, capital structure and regulatory environments as against firms that have been traditionally studied for governance effects and managerial risk aversion. Owokalade (2006) observed the definition of mergers as posited by the company and allied matters act decree of 1990 that any amalgamation of the undertakings of two or more companies or the undertaking of two or more companies and one or more bodies corporate. He emphasized that a form of dealings combination whereby two or more companies join collectively to become one; being voluntary liquidated by having it interest taken by the other and its shareholders becoming shareholders in the blown up existing company. Kurfi (2010) is of the view that mergers as a principle of the combination of two or more companies that translate same business purposes and agree to come together and decide whichever the given name of one of the companies or absolutely take a new name. He further mentioned that amalgamation is another word for merger. Mergers usually occur between firms of almost same size and are usually friendly. In the case of Stanbic bank and IBTC bank, they arrive at a name StanbicIBTC bank plc after their merger and the resultant name was due to the friendship earlier involved and almost same size of the banks. Kazmi (2006) grouped merger into four: horizontal, vertical concentric and conglomerate mergers. Further explanation revealed that horizontal mergers takes place where there is a combination of two or more firms in the same business, or an organisation engaged in certain aspects of the production and marketing process. When there is a merger of two or more firms but necessary in the same business which might be complementary in supply of materials or marketing is referred to as a vertical merger. The concentric merger takes place when there is a combination of two or more firms related to each other in line of function, customer group or alternative technologies used. Conglomerate merger occurs when there is a combination of two or more firms that are unrelated in customer function, customer group, and alternative technologies. There are situations where a company gets involved in all the above listed forms of mergers. For example, HP a computer and printers giant has merged with Com paq recently and before then acquire Apollo computers which related, acquired Agilent technologies which were into chemicals and medical business, acquired Mercury Interactive which was a software company. The UBA Merger Mergers and acquisition is simply a different approach encourage survival of the fittest is to give rise to a stronger, more efficient, better structure and skilled industry. The Guardian Newspaper reported in 2005 the UBA merger started with separate meetings where that boards of directors of UBA and Standard Trust Bank Plc accepted the arrangement for a union of both financial institutions. The bank aimed to become the biggest bank in West African and one of the largest in Africa. When they considered the assets of both banks before the merger, it was observed that had a formidable asset base after accessing their portfolios at that time and when is been concretised, they could customers from all sectors of the economy. It has over 100 branches spread out strategically across the country in what is described as the largest truly online real-time banking network in sub-Saharan Africa. It is often referred to as Nigerias neighbourhood bank. This derives from its national orientation in terms of geographic spread and continuing national expansion. Wheelen and Hunger (2008) confirmed that UBA the former Trade bank and Citi express bank because the firms were different in sizes and as such they can either be friendly or hostile. Todayà ¢Ã¢â€š ¬Ã¢â€ž ¢s UBA is a merger between two predecessors banks, legacy UBA and Standard Trust Bank (STB) which were ranked third and fifth in size respectively prior to the 2005 CBN reform and consolidation programme. It was a huge success as the ability to anticipate industry trends, coupled with the banks agility, enabled them to be the first successful merger in the history of Nigerian banking industry, thus creating the current UBA plc which its management rates as the largest financial services institution on West Africa. As the economies of Nigeria and Africa continues to improve, following the established path of the emerging market; i.e. increased political stability, improved government finances, growing domestic consumer demand, high commodity prices and significant improvement in the economic indicators, the UBA is well positioned as a warrant on the African renaissance story. The presence of UBA in all commercial centres and major cities in Nigeria and Ghana has earned the bank the nickname: the neighbourhood bank. This appellation ties in with the UBA brand promise. à ¢Ã¢â€š ¬Ã…“The wise choiceà ¢Ã¢â€š ¬? and guides our retail distribution strategy which enable us to deliver exactly should be expected by both potential and existing customers of the bank in respect to proximity, choice, convenience and customization. UBA is a bank that is operating out of two of the most vibrant economies in the sub region; Nigeria and Ghana, the new |UBA combines the financial strength of fifty-seven year UBA and the young , innovative and technology driven dynamism of the then STB. UBA has maintained a consistent and solid financial performance in its forty-five year history since it began business in 1961. The bank has record history of leading and pioneering innovations in Nigerian financial sector. It is the first ever and only Nigerian bank to surpass the one trillion balance sheet size with contingents inclusive. It is the only sub-Saharan African bank excluding republic of South Africa that has a branch in New York, USA. UBA was ranked the number one bank in Nigeria in 2007, and bank of the year award (Thisday, 2007). This was due to the banks outstanding performance in the banking sector. Euromoney (2000) confirmed that UBA was the best domestic bank in Nigeria and was the first among international banks to be registered under Nigerian law. The bank has received excellence credit ratings both short and long term, global credit rating (SA) AA+ and A+ in 2005.UBA is the first Nigerian bank to offer an IPO following its listing on the Nigerian stock exchange in 1970. UBA was the first Nigerian bank to introduce a Cheque Guarantee Scheme known as the UBACARD in 1986. It was the first bank to introduce the Nigerian Government Bond index in 2006. It was also the only Nigerian company with the GDR programme. The GDR is a negotiable certificate representing ownership of shares. They are quoted and traded in US dollars and the dividends are paid in same currency. It is specially designed to facilitate the purchase, holding and sale of non US securities by foreign investor. This GDR programme enables foreign institutional investors to hold and trade UBA shares without having to expatriate funds into Nigeria. This Depositary Receipt (GDR) is preferred by some investors who are unable to hold Nigerian securities for compliance reasons or due to a lack of the appropriate infrastructure for holding an ordinary share. The GDR also trade, clear and settle according to international market conventions rather than those prevalent in Nigeria (UBA Report, 2008) West Africa and indeed everywhere the bank has presence. It is simple, elegant, vibrant and memorable, combining the mustard seed of legacy STB and the typographic execution of the letters UBA, predominantly in red and white. During the period of the former standard trust bank plc (STB Plc) acquired 27.34% of the United Bank for Africa Plc (UBA plc) and this transaction resulted not a merger between the two banks, whereby all assets and liabilities of standard trust bank Plc were transferred to UBA Plc. The entire share capital of STB was cancelled and STB was dissolved without being wound up and the shareholders of STB were allotted UBA shares.