Project 10 Manager

BANKS PERFORMANCE
AND CUSTOMER
SATISFACTION:
A STUDY OF FIRST BANK OF
NIGERIA PLC
By
SUNDAY ELISHA MANAGER

U06BA1015
Being a Research Project to the

Department of Business
Administration,
Faculty of Administration,
Ahmadu Bello University, Zaria, in
Partial Fulfilment of the
Requirements for the Award of
Bachelor of Science (B.Sc. Hons.)
Degree in Business Administration.
Banks Performance And Customer Satisfaction:
NOVEMBER, 2010.
A Study Of First Bank Of Nigeria Plc Page ii

DECLARATION
I hereby declare that this research project titled:
Banks Performance and Customer Satisfaction: A Study of
First Bank of Nigeria Plc has been carried out by me under
the supervision of Dr. Auwal Y. Ahmad in the Department of
Business Administration, Ahmadu Bello University, Zaria.
The information contained in the reviewed literature
and other documentary sources referred to has been duly
acknowledged in the text and the list of references
provided. To the best of my knowledge, no part of this
project report has been previously presented for the award
of any degree or diploma in any higher institution.
_____________________________ ________________
SUNDAY ELISHA MANAGER Date
A Study Of First Bank Of Nigeria Plc Page iii

CERTIFICATION
This project report titled: Banks Performance and
Customer Satisfaction: A Study of First Bank of Nigeria Plc
by Sunday Elisha Manager meets the regulations governing
the award of Bachelor of Science (B.Sc.) Degree of the
Department of Business Administration, Faculty of
Administration, Ahmadu Bello University, Zaria, and is
approved for its contributions to knowledge and literary
presentation.
________________________ ________________
DR. AUWAL Y. AHMAD Date
Project Supervisor
__________________________ ________________
AMINU S. GUMI Date
Project Co-ordinator
__________________________ ________________
DR. BELLO SABO Date
Head of Department
A Study Of First Bank Of Nigeria Plc Page iv

DEDICATION
I dedicate this work to my Lord and Saviour Jesus
Christ. In the potters hand something is made out of
nothing. Thank you Father for your faithfulness, Grace and
Mercy. To God be the Glory.
To my Boss - Barrister Amos Adebayo Oriola. My story
could not have been complete without you. You gave me a
life that Im forever proud of. I am grateful for the love,
tolerance and kindness youve shown to me over the years.
I can never ever find words to thank you enough. My
children and generation unborn will hear of this great thing
youve done. You changed my story. May God bless and
reward you sir.
A Study Of First Bank Of Nigeria Plc Page v

ACKNOWLEDGEMENT
All Glory I return to God, whose hands provided all that
I need to undergo this programme. I am nothing without
you Yahweh.
My inestimable gratitude goes to my Project
Supervisor and my best lecturer Dr. Auwal Y. Ahmad for his
time given to my work, enabling me to come out with
something meaningful. My appreciation goes to my
lecturers that impacted so much in me ensuring that we are
upright both in academics and character. Some of whom
are Dr. A.B. Apkan, Dr. M.N. Maiturare, Dr. Sabo Bello (Head
of Department), Alh. Baba, Mal. Yakassai, Mal. Ado Garba,
Mal. Mohammed Ibrahim, Mal. Ladan, Mal. Saulawa, Mal.
Idris, Haj. Safiya Adamu, Mal. A.T. Sharubutu, Mal. Nasiru,
Mal. Aminu Gumi, Mal. Bashir Nafiu, Mrs. Helen Owolabi,
Mal. Yusuf Shafa, Mal. Hamisu (late) and finally Mal. S.M.
Gegu (late).
My profound gratitude goes to my Boss Barrister Amos
Adebayo Oriola. You championed my course in life. I lack
words to say thank you. I cant repay you but I pray God
will. May you live to be proud of me (Amen).
To my parent Mr. & Mrs. Manager Hamajan for love and
care given to me from childhood to this moment, ensuring
that I have all it takes to lead a good life. God bless you.
I am also indebted to my brothers and sisters for their
love and care to me. Jafaru, Alheri, Paulina, Adama, Rosa,
A Study Of First Bank Of Nigeria Plc Page vi

Awuni, Ladidi, Biggy, Actor, Esther and finally Godffery
(late), you are my all in life.
My story will be incomplete without mentioning my
friends whom we went through the ups and down of the
campus together. Some of whom are Friday Omonu
(Bishop) the love I have for you is like that of David and
Jonathan, Faruk Lawal (my closest pal in school), Moses
Jonathan alias legend of the Seeker (my backbone in
Campus), Kunle Victor (Prof), Stephen Odawn, Kelechi
Mathew (Saint K.C.), Danjuma Akoh, Lord Eniaza, Francis,
Sunday Ameh, Shehu, Nuradeen (Chairman), Dauda, Philip
(Kotler), Kwasu Prince, Jonathan Enape (Joe), Amina Jummai,
Mariam, Gingin Rebecca, Lizzy, Hauwa, Ruyal, Bolaji Mejabi
(you-are-a-leader), Sultan, Nache (my first roommate),
Nyankashot, Jude, Ponjul, Hassan Alex, Harrison,. You are
the best. And what shall I more say? For, time would fail me
to tell of Adanna Ubani, Lekan, Ene, Sarah, Ete Ete, Alvan,
Nzeke, Christy, Kofa, Omoze, Promise, David, Uncle Emma,
Mr. Peter, Bro. Andrew, Bro. Ayo, Bro. Tope, Sis. Gladys,
Oluwaseye, Bumi and Pst. & Mrs. Steve. Finally, my best pal
Chef Okon, Blacky, Aminu; I love you all.
A Study Of First Bank Of Nigeria Plc Page vii

ABSTRACT
This research work is an attempt on examining the services

that are rendered to customers by the banking industry,
with a view to determining whether customers are satisfied
or not vis--vis performance of Banks. The choice of this
research topic, was motivated by the need to look into the
incessant complaints of poor customer services in the
banking industry and the quest for more knowledge on
banker-customer relationship. The research study,
emphasised customers satisfaction as the essence for
every business existence. Also, it has established a
relationship between employees satisfaction with their
productivity which will determine the quality of services
they render to customers. Questionnaires were used as the
research method for the collection of the required data.
The total population of staff and management of First Bank
Nigeria Plc Zaria, No. 1 Crescent road was given to be 24 of
which the entire population was selected as the sample. In
an attempt to validate the research work, the following
hypotheses were formulated.
Ho: There is no relationship between Bank performance
and customer satisfaction.
H1: There is a relationship between Bank performance and
customer satisfaction.
The alternative hypothesis was accepted while the null
hypothesis was rejected. Data collected from respondents,
were presented and analysed with the use of simple
percentage. The hypothesis, was tested using correlation
and regression analysis. The data was further discussed
and interpreted. To this end, summary of the major
findings, conclusions and recommendations were also
made. The findings indicated that first bank Nigeria Plc
motivates its employees and that the motivation has a
significant impact on their employees productivity. This in
turn has a positive impact on the Banks performance,
leading to customers satisfaction. Among the
recommendations made were that First Bank Nigeria Plc
Zaria, should improve on its non-monetary rewards to
employees (intrinsic motivation). Intrinsic motivation such
as recognition should be given top priority among the
motivational incentives.
A Study Of First Bank Of Nigeria Plc Page viii

TABLE OF CONTENTS
Title page - - - - - - - - i
Declaration - - - - - - - ii
Certification - - - - - - - iii
Dedication - - - - - - - - iv
Acknowledgement - - - - - - v
Abstract - - - - - - - - vii
Table of contents - - - - - - viii
CHAPTER ONE: INTRODUCTION

1.1 Background to the study - - - - 1
1.2 Statement of the problem - - - - 3
1.3 Research questions - - - - - 5
1.4 Objectives of the study - - - - 5
1.5 Research hypotheses - - - - - 6
1.6 Significance of the study - - - - 7
1.7 Scope of the study - - - - - 7
1.8 Limitations of the study - - - - -
8
1.9 Definition of terms - - - - - 9
CHAPTER TWO: LITERATURE REVIEW

2.1 Introduction - - - - - - 10
2.2 Concept of commercial banking in Nigeria - 10
2.3 Bank performance evaluation - - - 13
2.3.1 Bank services involving transactions with customers-
18
2.3.2 Quality of banks services - - - - 21
2.3.3 Indicators of banks high performance - -
23
2.3.4 Bank performance and customers retention -
26
2.4 Customers satisfaction era - - - - 27
2.5 Indicators of customer satisfaction - - -
29
2.6 Linking employee satisfaction with productivity,
performance and customer satisfaction - -
30
2.7 Banker-customer relationship - - - 32
2.7.1 Customers satisfaction as a source of
competitive advantage - - - - 32
2.7.2 Summary - - - - - - - 39
2.8 Brief history of first bank Nigeria Plc - - -
40
A Study Of First Bank Of Nigeria Plc Page ix

CHAPTER THREE: RESEARCH METHODOLOGY

3.1 Introduction - - - - - - 43
3.2 Research Design - - - - - -
43
3.3 Population Of The Study - - - - 44
3.4 Sampling And Sampling Techniques - - 44
3.5 Research Instrument - - - - - 45
3.6 Statistical Tools - - - - - - 46
3.7 Method Of Data Analysis - - - - 47
3.8 Justification Of Methods Used - - - 49
CHAPTER FOUR: DATA PRESENTATION AND

ANALYSIS
4.1 Introduction - - - - - - 50
4.2 Data Presentation And Analysis - - - 51
4.3 Test Of Hypothesis - - - - - 60
4.4 Discussion Of Finding - - - - - 64
CHAPTER FIVE: SUMMARY, CONCLUSION AND

RECOMMENDATIONS
5.1 Summary - - - - - - 67
5.2 Conclusion- - - - - - - 68
5.3 Recommendations - - - - - 69
Bibliography - - - - - - 71
Appendices - - - - - - 72
A Study Of First Bank Of Nigeria Plc Page x

CHAPTER ONE
1.1 Background to The Study
The banking industry is highly competitive, with banks
not only competing among each other but also with non-
bank and other financial institutions. For centuries, banks
have played an important role in financial system of the
country. The vital role continues even today, although the
form of banking have changed with changing need of the
economy and individual. With expansion of trade and
commerce, the concept of banking has gained more
importance. Banking transcended from individual to groups
and later to companies.
The Nigerian Banking industry occupies an important
place in the nations economy. It plays a pivotal role in the
economic development of the country and forms the core of
money market in an advanced country. The question then
arises as to whether the Banking sector renders efficient
services to their huge earnings, and are customers
adequately compensated by the Banking Industry for their
patronage?
In evaluating the performance of Banks, some analysts
use the profit as a test of economic efficiency. Thus,
classifying banks as performing or non-performing using
A Study Of First Bank Of Nigeria Plc Page 1

profit as a yardstick for measuring their efficiency may not
give the true picture of Bank performance. Recent studies
have revealed this. Hence, the use of multivariate approach
which includes the degree of satisfaction the customer
derives from the services rendered by the Bank is the most
appropriate.
Banks have started realising that success depends on
the quality of services they render, and also on customers
satisfaction. Thus, compelling them to improve on customer
services and build up better relationships with customers.
The working of the customers mind is a mystery which
is difficult to solve. And the understanding of the nuances of
what customer satisfaction is, is a challenging task. This
exercise, in the context of the Banking industry will give us
an insight into the parameters of customers satisfaction.
Banks have to deal with many customers everyday and
render various types of services to their customers. Its a
well known fact, that no business can exist without
customers. Therefore, customers have become the focal
point for an organization that wishes to survive in a highly
competitive environment. For the banks, customers
constitute the most important reason for their operations.

Therefore, any issue relating to customer satisfaction must
be given due consideration.
The Bank- customer relationship, will be explained in
order to acquaint both the banker and the customer with
their rights and responsibilities. This research study is
motivated because of the complaints and series of
allegations, levelled against the Banks on their poor
customer services. If these complains are neglected, it
would affect the overall performance of banks.
Consequently, their objective of maximising profit would not
be realised. This study also aims at educating customers
more on their rights and obligations, given the fact that the
relationship between the Banker and his customer is a
contractual one. The recommendations will focus on
improving the performance of the banking sector. Against
this Background, the study intends looking at Bank
performance and customer satisfaction.
1.2 Statement of the Problem
Over the years, there have been considerable
criticisms by many customers on the performance of banks.
Most managers have been accused of being too hard on
their employees, due to the fact that they want them to
perform.
Unproductivity, they believe emanates from a negative
attitude towards work. Simply put, the average Nigerian
worker detests work environment. If this be the case, it
implies that the productivity or output of the Nigerian
worker will be minimal and may not meet the needs of the
populace. This, insinuates that the economic development
of the nation will be impaired to eschew this. It is therefore
imperative that workers productivity be improved and also
that customers needs be satisfied. It should also be
recognised by management, that satisfaction is as
important to the customer as profit is to the organisation. A
study of this nature, deals with a sensitive business
( Banking ) in the Nigeria Business Environment. It centres
on the type of services Banks render to their customers,
how satisfactory these services are to customers and to the
economic development of the nation.
However, as important as the Banking Sector is to the
customer, Banks on the other have hand failed to realise
how the important their customers are to them - the
reason for their employment. It is against this background
that the researcher wishes to evaluate Bank Performance
and how it affects the customer.

There has been public outcry against the poor services
delivered by the Banks to their customers. If the
performance is poor due to the fact that it is understaffed or
there are inexperienced or unskilled staff, then what are the
likely consequence to individual Banks, the Banking industry
and the entire economy?
Therefore, the research study attempt to ascertain
whether there is a relationship between bank performance
and customers satisfaction or whether no relationship exist
between bank performance and customer satisfaction.
1.3 Research Questions
In the course of the research, the research attempted
to answer the following research questions.
- To what extent can Bank performance affect
customers satisfaction?
- Is there a relationship between Bank performance
and customer satisfaction?
- To what extent can lack of motivation affect
performance?
- To what extent can inadequate manpower affect
performance?
1.4 Objective of the Study
The objective can be summarised as follow;

- To examine factors that enhance performance.
- To identify the standard set by management and
how performance is measured.
- To examine how productivity of staff can be
improved.
- To ascertain whether there is actually a better
working condition in the Banking industry.
- To carryout a critical analysis on the type of
services offered by Banks.
- To investigate the criticism of poor customer
services often levelled against the Banks.
- To enlighten the customer as to the role that
Banks are expected to play in the society which
will enhance a good bank-customer relationship.
- To recommend measures that will enable banks
improve their performance.
1.5 Research Hypotheses
The following hypotheses have been formulated and
would be tested in the course of this study.
H o: There is no relationship between Bank
H1: There is a relationship between Bank
performance and customer satisfactory.

1.6 Significance of the Study
The significance of this research work, is to examine
the impact that Bank performance will have on customers.
This research is very important because it intends to explain
those rating techniques necessary to improve employees
performance. This will help management to solve problems
of unproductivity. This is because no organisation will be
able to achieve its objectives effectively without attaining
certain level of performance. This research will be useful for
managers, who want to motivate their workers in order to
have a more productive result. In addition, this research
can help other researchers who are interested in working on
this field of study. This work is also useful for the general
public who want to know about the Banking Industry (i.e.)
First Bank of Nigeria Plc.
1.7 Scope of Study
It is apparent to state that in a research of this nature,
the researcher has to limit himself to a particulars area.
There are so many banks, but the researcher has chosen
First Bank of Nigeria Plc. Zaria, and he intends to use the
management, staff and also customers of the bank.

This research also attempts to investigate the
following:
i. The quality of services as presently offered by
Banks in Nigeria.
ii. Causes of poor quality banking services.
iii. The impact of bank performance on customer
satisfaction.
1.8 Limitations of the study
In the course of this research, the researcher
encountered some problems. Firstly, the researcher could
not gain easy access to the staff of the organisation under
study. However, the problem was solved through conviction
by the researcher with the letter of introduction obtained
from the department.
Secondly, the researcher could not retrieve some of
the questionnaires taken to the field of study.
Finally, the researcher also encountered financial
problem in the course of this research. However, the
problems encountered in the field did not in any way affect
the validity and reliability of the study.

1.9 Definition of Terms
Customer: A person becomes a customer
immediately he opens an account: he does not need to
have habitual dealings with a banker in order to rank
as a customer.
A Bank: An organisation which deal in money
receiving on deposits from customers, honouring
customers drawings against deposits on demand,
collecting cheques for and lending or investing surplus
deposits until they are required for repayment.
Customer Satisfaction: The good feelings that
customers have as a result of the good treatment
received from their bank which induces loyalty.
Quality: A high standard.
Performance: How well or badly something is done.
Commercial Bank: Commercial Bank is also known
as clearing bank, which takes cash and collect cheques
of their customers drawn on other banks.

CHAPTER TWO
LITERATURE REVIEW
2.1 Introduction
It appears that what customers are saying, is that they
expect good product and services from their banks. What is
more important to them is to have courteous and
professional employees whom they can trust to explain to
them and correct problems when they happen. Of
importance to them also, is not only the account itself but
the quality of services rendered.
Thus, this chapter considers operations of commercial
banks, the relationship with their customers and most
importantly establishes a relationship between employees
satisfaction and performance which determines the level of
customers satisfaction.
2.2 Concept Of Commercial Banking In Nigeria
Banking operations began in Nigeria in 1892 under the
control of expatriates and by 1945, some Nigerians and
Africans had established their own banks. The first era of
consolidation ever recorded in Nigeria banking industry was
between 1959 1969. This was occasioned by bank failures
during 1953 1959 due mainly to liquidity of bank. Banks,
then do not have enough liquid assets to meet customers

demand. There was no well-organised financial system with
enough financial instruments to invest in. Hence, banks
merely invested in real assets which could not be easily
realised to cash without loss of value in times of need. This
prompted the federal government then, backed by the
World Bank Report to institute the Loynes Commission on
September 1958. The outcome was the promulgation of the
1958, which established the Central Bank of Nigeria (CBN).
The period (1959 1969) marked the establishment of
formal money, capital markets and portfolio management in
Nigeria. In addition, the company Acts of 1968 were
established. This period could be said to be the genesis of
serious banking regulation in Nigeria. By January 2001,
banking sector was fully deregulated with the adoption of
universal banking system in Nigeria which merged merchant
banks operation to commercial banks system, preparatory
towards consolidation programme in 2004.
Source: http//www.eurojournls.com
Osubor J.U. in his book Business Finance and Banking
in Nigeria, posits that commercial banks are a nations most
important financial institutions in the sense that, their
performance of services are unique and are distinguished

from other forms of financial institutions or intermediaries
because of the following characteristics:
a. Commercial banks hold the nations money
supply;
b. They are the only financial intermediaries whose
demand deposits circulate as money;
c. Commercial banks lending can create additional
bank deposits through redeposit of the money by
the borrower, unless the public choose to hold
more currency;
d. They have the sole power to create money
through the monetisation of debt or through a
promise to pay, I.O.U.: and also, the power to
destroy money.
Commercial banks in Nigeria, is said to be one of the
oldest industries. These banks are the most important type
of financial institution in terms of aggregate assets. In
terms of employment, commercial banking is one of the
largest industries. In Nigeria ,commercial banks have
continued to be the dominant segment in the banking
industry. Assets of commercial banks which stood at 32.89

percent of the GDP in 2004, rose marginally to 35.43
percent in 2006.
Source: http//www.eurojournls.com
This is an indication that commercial banks are not just
the cornerstone in the banking industry, but also for the
countrys financial system as a whole.
2.3 Bank Performance Evaluation
Over the years, numerous complaints have been
received from customers, concerning the poor treatment
they receive from their banks, ranging from poor human
relations to their financial performance which are most often
not encouraging. The question here is are things as bad as
they seem to be? In order to make an objective and sound
evaluation of banks performance, there is every need to
consider the past performances alongside with the present.
Bank performance will be categorised into two aspects
for the purpose of this research work.
1. Banks financial performance
2. Employees performance

Performance Pre And Post Consolidation Financial Of
Banks
The current credit crisis, have questioned the
effectiveness of bank consolidation programme as a remedy
for financial stability and monetary policy in correcting the
defects in the financial sector.
We denote year 2004 as the pre-consolidation and
2005 and 2006 as post-consolidation period for our analysis.
In terms of Assets, the table below shows that the total
asset of all the 89 banks operating in Nigeria in 2004 prior
to the consolidation was N3,753.28 billion (US$28.250
billion) and rose to N6400.78 billion (US$49.88 billion)
indicating a growth rate of 70.54.16 percent within one year
after consolidation.
The asset size of an average bank which was N42.172
billion (US$0.3174 billion) grew geometrically to N267.482
billion (US$2.0856 billion) within a year after the
consolidation exercise, a growth rate 534.27 percent. This
was said to be an impressive performance.
Source; http://www.eurojournals.com

Table 1: Pre-Post Consolidation Performance Of The
Nigerian Banks

The profit efficiency/asset utilisation has not been
impressive. Although the banks have been able to double
their gross earnings from their pre consolidation
performance level, their profit and asset utilisation
efficiencies have declined since the conclusion of the
consolidation. For instance, the industry return on equity
declined from 35.28 percent in 2004 to 11.12 percent in
2006, while return on asset declined from 8.37 percent to
2.09 percent over the same period. The asset utilisation
ratio also declined; while an average bank was able to earn
34 kobo for every N1.0 asset in 2004, this declined to 11
kobo in 2006. Thus, while the consolidation has improved
the structure of the Nigerian banking industry in terms of
asset size, deposit base and capital adequacy the profit
efficiency has not been impressive. The banks will need to
become more efficient in terms of their ability to generate
enough return, to justify the increase in the equity base as
well as the resources put at their disposals by their
stakeholders. The lending capacity of the banks improved
significantly as a result of the consolidation. As at 2004, an
average bank could only lend about N14,371 billion. Where
as, the consolidation strengthened the banks. where a
typical bank in Nigeria in 2006 could lend an average of

N80,788 billion. This represents a growth of 462.13 percent
growth.
Source; http://www.eurojournals.com
The above analysis reveals that banking sector is
becoming competitive. And that market forces are creating
an atmosphere where many banks simply cannot afford to
have weak balance sheets and inadequate corporate
governance. Of key interest to the customer is the balance
sheet of the banks. The assets of banks draw customers
interest. An astonishing asset level of banks keeps
customers fears allay and makes them put confidence on
the system. A sound balance sheet, often makes a
customer sound.
Banks Employees Performance
Over the years, numerous bank customers have
forwarded complaints on the poor human relations they get
from bankers. The question here is who is to blame?
Dick Clark (2003) noted that it is common sense,
when people feel great about the place where they work
they provide better customer service.
Perhaps, reason why customers receive undue
treatments from their bankers may be traced to the fact

that these employees are not intrinsically motivated.
Intrinsic motivation means that employees are motivated
because of the satisfaction they get while doing their job. It
comes from within the employee rather than from any
extrinsic rewards, such as monetary incentives. Intrinsic
motivation also shows that the employee is more interested
in the job which interests him with good working
environment and a sense of responsibility to perform the
task. Such an employee is motivated to work, because he
finds the job interesting enough to give him satisfaction
after completing it. When employees are satisfied with their
jobs and the working conditions, they tend to give in their
best to the work.
Thus, worthy of note is that for bank employees to
maintain a friendly behaviour towards customers, managers
must ensure that their employees find their jobs interesting,
with a good working environment. And also, should ensure
that employees are satisfied with the conditions of service
including their monetary rewards.
2.3.1 Bank Services Involving Transactions With
Customers
The primary operations of banks include:

a. Keeping money safe while also allowing withdrawals
when needed.
b. Issuance of check books so that bills can be paid and
other kinds of payments can be delivered by post.
c. Provide personal loans, commercial loans, and
mortgage loans (typically loans to purchase a home,
property or business).
d. Issuance of credit cards and processing of credit card
transactions and billing.
e. Issuance of debit cards for use as a substitute for
cheques.
f. Allow financial transactions at branches or by using
Automatic Teller Machines (ATMs).
g. Provide wire transfers of funds and Electronic Fund
Transfers between banks.
h. Facilitation of standing orders and direct debits, so
payments for bills can be made automatically.
i. Provide overdraft agreements for the temporary
advancement of the banks own money, to meet
monthly spending commitments of a customer in their
current account.

j. Provide charge card advances of the banks own
money for customers wishing to settle credit advances
monthly.
k. Provide a check guaranteed by the bank itself and
prepaid by the customer, such as a cashiers check or
certified check.
l. Notary service for financial and other documents.
Other Types Of Bank Services
a. Private banking private banks provide banking
services exclusively to high net worth individuals.
Many financial services firms require a person or
family to have a certain minimum net worth to qualify
for private banking services. Private banks Often
provide more personal services, such as wealth
management and tax planning, than normal banks.
b. Capital market bank bank that underwrite debt and
equity, assist company deals (advisory services,
underwriting and advisory fees), and restructure debt
into structured finance products.
c. Bank cards include both credit cards and debit cards.
Bank of America is the largest issuer of bank cards.
d. Credit card machine services and networks
companies which provide credit card machine and

payment networks call themselves merchant card
providers.
Foreign Exchange Services
Foreign exchange services are provided by many
banks around the world. Foreign exchange services
include:
a. Currency Exchange where clients can purchase and
sell foreign currency banknotes.
b. Wire Transfer where clients can send funds to
international banks abroad.
c. Foreign Currency Banking banking transactions are
done in foreign currency.
Investment Services
a. Asset management the term usually given to
describe companies which run collective investment
funds.
b. Hedge fund management hedge funds often employ
the services of prime brokerage divisions at major
investment banks to execute their trades.
c. Custody services the safe-keeping and processing of
the worlds securities trades and servicing the

associated portfolios. Assets under custody in the
world are approximately $100 trillion.
2.3.2 Quality Of Banks Services
Service quality refers to a number of inter-related
factors including the way in which individuals are treated by
providers, the scope of services available to clients, the
quality of the information provided to the clients and quality
of the counselling skills, the promotion of individual choice,
the technical competence of providers, and the accessibility
and continuity of services.
SOURCE: http://erc.msh.org/mainpage.cfm.
The Japanese industrial standards committee defined
quality as a system of means to economically produce
goods or services which satisfy customers requirements.
SOURCE: http://www.qualitydigest.com.
Longman dictionary 2003 defined quality as a high
standard.
The quality of commercial banking services in Nigeria,
has caused quite some stir in recent times. Customers are
clamouring for high standards of the services rendered by
banks. Customers have always wanted their banks to
understand that a customer is not an interruption in the
bankers work; but he is the purpose for the bankers work.

Not until recent times that it dawned on providers of
banking services that they are not doing customers a favour
by rendering quality services, but that a satisfied customer
is a key to continued existence. Customers expect their
transactions with the banks to be hitch free and time saving.
Thus, quality of bank services can be seen from these view
points:
a. Friendliness/courteousness of employees.
b. Responsiveness to requests.
c. Appearance of physical facilities.
d. Approachability of the services provider.
e. Willingness to listen to customer.
f. Honesty and an ability to communicate in clear
language.
g. Safety in terms of the customers money (financial
safety).
Bankers are bent on improving the standard of their
services to their customers, upon the realisation that
customers are the reason for the existence of the business.
2.3.3 Indicators Of Banks High Performance
Kazmi (2006) noted that Performance indicators are
well understood as being metrics or measures in terms of
which performance is measured, evaluated or compared.

Key Performance Indicators (KPIs) are the metrics or
measures in terms of which the critical success factors are
evaluated. What makes the key performance indicators
key is their relationship to the critical success factors and
ultimately, to the vision of the organisation/industry. An
organisation for instance might have the vision to be the
most profitable company in the industry. In making this
vision operational, it needs to determine key performance
indicators such as pre-tax profit or shareholder equity that
measure profitability.
In the banking industry, a firm that considers high
service quality or cost efficiency as its critical success
factors, has to think of metrics in terms of which will
measure these parameters. Since every firm in the banking
industry aims at providing quality service to its customers at
low cost in order to maximise profit, below are factors that
indicate whether a firm is performing as it ought to or not.
High Performance Indicators
a. High return on investment.
b. First trial customers.
c. Repeat customers.
d. Number of complaints received compared to the
number of complaints solved.

e. On-time service delivery.
f. Proper check of fraud.
a. High Return on Investment: The ratio measures the
ability of the firm to utilise assets to a profitable level.
A high ratio signifies high profit, while a low ratio
signifies a low profit.
b. Repeat Customers: When a customer after his first
trail, comes back again, this indicates that he was to a
large extent satisfied with the treatment he received
from the bank on his first trial. A high number of
devoted customers, indicates that the firm is
performing up to customers expectation.
c. Number of Complaints Received and the Number
of the Complaints Solved: A high number of
complaints shows that a bank is wanting in a certain
areas. Also, when complains are received the number
of such complaints that are solved also tells how
effective the firm is in handling customers.
d. On-Time Service Delivery: Customers are delighted
when their transactions with their banks are completed
in the shortest possible time. A service provider that
delivers services to customers saving the customers

time and energy, is surely satisfying one major area of
customers desire.
e. Adequate Check of Fraud: Organisations with no or
little account of fraud are perceived to be credible and
financially prudent. Customers minds are at rest when
their money is secured from fraudsters. This is also an
indicator of good performance.
2.3.4 Bank Performance And Customers
Retention
The essence of a business idea is not just to attract
new customers but also, to retain the existing customers by
delivering satisfaction.
Jagdish (2004) believed that the twin strategies of
business success are employee satisfaction and customer
satisfaction. He observed that in the early stages of a
companys lifecyle, its success depends heavily on
employees and their soldier-like devotion and hard work.
And in the maturity stage of the companys life cycle,
success depends on retaining existing customers.
Jagdish, emphasised that at the maturity stage, a
smart management must focus on the external world of
customers and their needs, in addition to the internal world
of employees and their operations. At this stage,

customers interest must be given top-most priority,
otherwise, customer defection arises. Customer defection
which means losing a business. This occurs when an
unhappy customer decides to stop the hire or purchase of
the services or products of the firm and decides to find
some other suitable alternative that satisfies his needs
which the organisation has failed to deliver.
Customer defection is a threat to the organisation
which is very obtainable in the banking industry. When
customers expectations are not met, or bankers
relationships are not too cordial with their customers, this
could result in customer defection. On the other hand,
customers retention is a great opportunity to the
organisation.
Hay Day (2003) also noted that staff commitment is
the key to improved performance. To retain customers,
management must seek to improve the quality of their
services by performing better and better as days go by.
There is need for innovation. There is need to correct the
flaws of the past and improve on past successes. This is a
key to retaining customers.
2.4 Customers Satisfaction Era

In the past few decades, consumers choices have
exploded in retailing, banking, telecommunications,
broadcasting, and many other spheres of business. The
world we live in has clearly become a much more complex
environment. With these constantly changing
circumstances, has come the need to develop stronger,
deeper relationships with customers. To deliver a greater
level of satisfaction to customers for which they pay for.
The fundamental principle behind customer
satisfaction and its measurement as noted by Jagdish, is
that business performance creates satisfaction. And
satisfied customers are more likely to be loyal (and
recommend the service to others). And loyal customers
with longer life times and high life time values mean
greater market shares and profits.
In satisfying customers, the first step is to identify the
three groups of customers those in pain, those merely
satisfied and those who are delighted. Managers should
make efforts by increasing their performance level so as to
move customers in pain region to delight region. Customers
that are merely satisfied should be moved to delight region
by making an improvement in performance no matter how
small. Likewise, managers should maintain or make slight

improvement in their performances level to those customers
that are delighted with the services they receive in order to
keep them floating at the delight zone. Therefore, it is
worthy of note that customers demand quality services like
never before. Hence, to keep an organisation going,
managers must realise that the present era is an era to keep
customers satisfied otherwise the organisation is heading
for doom.
Source: http://www.ipsos.ca/prod/loyalty/newEra.cfm
2.5 Indicators Of Customers Satisfaction
Customers satisfaction is sometimes hard to achieve
because it changes from customer to customer and day to
day. It is ever moving. However, it is possible to know
whether customers are satisfied or not.
One can tell if a customer is satisfied by looking at the
following criteria:
1. How much do the customers consistently buy from the
company? Is the rate increasing or decreasing?
Satisfying customers needs, leads to retaining the
customers. Satisfied customers find a way to do more
business or transaction with the company. If the rate at
which customers consistently buy a companys product or
use the companys services is decreasing, this indicates

customers dissatisfaction. But if on the other hand, the rate
at which customers consistently use the companys services
is increasing, this is a sure indicator that customers needs
are being met and that they are satisfied.
2. Do customers pay their bills on time?
Satisfied customers pay on time. Since they feel
satisfied with the services rendered by the organisation, and
are happy with treatment they receive from their service
providers, they seek to reciprocate the gesture by paying
their bills in good time.
3. Do they give you referrals? If asked, satisfied
customers give referrals.
Another indicator of customer satisfaction is when you
ask the customer is there any thing else I can do for you at
this time? A satisfied customer will answer no. If they
have other unmet needs/concerns, and are truthful and
appreciate your service, they will tell you the areas they are
not satisfied with.
Therefore, it is imperative to know whether customers
are satisfied with the services they receive or whether they
are not. This is because satisfied customers make the
business go on.

2.6 Linking Employees Satisfaction With
Productivity, Performance And Customer
Satisfaction
Employees in service jobs often interact with
customers. Since the management of service organisations
should be concerned with pleasing these customers, it is
reasonable to ask: is employees satisfaction related to
positive customer outcomes? For frontline employees who
have regular contact with customers, the answer is yes.
The evidence indicates that satisfied employees
increase customer satisfaction and loyalty. Why? In service
organisations such as banks, customer retention and
defection are highly dependent on how frontline employees
deal with customers. Satisfied employees are more likely to
be friendly, upbeat, and responsive which customers
appreciate. And because satisfied employees are less prone
to turnover, customers are more likely to encounter familiar
faces and receive experienced service. These qualities of
the employees build customer satisfaction and loyalty.
Clark (2003) stated that it is common sense when
people feel great better customer service.

Federico (2003) also stated that employee
satisfaction leads to customer satisfaction. When internal
customers (employees) are happy, they treat external
customers well. Customers will keep coming back for more.
This enhances their relationship and leads to customer
loyalty.
2.7 Banker-Customer Relationship
The world we live in has clearly become a much more
complex environment. With things constantly changing,
there is need for banks to develop stronger, deeper
relationships with customers in order to keep customers
satisfied at all times.
The relationship between banker and customer is a
contractual one. The contractual relationship which exists
between banker and customer is a complex one founded
originally upon the customs and usages of bankers. Many of
those customs and usages have been recognised by the
courts, and, to the extent that they have been so
recognised, they must be regarded as implied terms of the
contract between banker and customer.
Therefore, relationship between the banker and the
customer exist mainly at these two points.

i. The cashiers point
ii. The managers point
i. The Cashier And The Customers:
The cashier by virtue of his duties comes into contact
with the public (customers) more often than any employee
of the bank. The numerous functions the cashier performs,
makes specialisation a must so as to make transaction
easier. The cashier must therefore possess the spirit of
tolerance, must be accommodating. It is expected of him to
have technical and interpersonal skills to handle customers
appropriately, knowing the implications of his every actions.
The cashier must be courteous, address customers in a
cultured manner and most importantly exude confidence.
ii. The Manager And Customers
The branch manager is at the apex in the branch of a
bank. And also, represents the management. He is more of
the chief public relation officer of the branch. Therefore, he
must be in the forefront, in projecting the good image of the
bank through his attitude to customers. He must know who
the customers of the bank are, as well as try to win more
customers. He must understand their problems, grant them
audience and seek for suggestions from them on how to

improve on the services rendered to the customers. This
makes a customer have a feeling of being recognised.
2.7.1 Customers Satisfaction As A Source Of
Competitive Advantage
Customer satisfaction can provide a firm with major
competitive advantages, which can directly lead to increase
in profitability and growth.
Jagdish in his article titled Competitive Advantages
through Customer Satisfaction observed that in the early
stages of a companys lifecycle, the companys success
depends heavily on employees and their soldier-like
devotion and hard work. But noted that when the business
grows, and the company reaches the maturity stage of its
lifecycle, it is common to find satisfied employees but
dissatisfied customers. The company now depends much
more on its customers and not the other way round.
Success now depends heavily on how satisfied the
customers are with the services or products of the company.
Below are five competitive advantages a company
gains from satisfying customers.
1. Repeat buying results in lower costs.
2. Customer satisfaction creates price advantages.
3. Customer satisfaction limits corporate crisis.

4. Satisfied customers generate new customers.
5. Customer satisfaction encourages successful
innovations
Repeat Buying Results In Lower Costs
Jagdish noted that in a matured market, perhaps the
best competitive advantage a company can maintain is
through retaining its customers, since as much as 90 to 95
percent of total business comes down from existing
customers. Competitive strategies for retaining existing
customers, tend to be less costly than those for gaining new
customers. He noted that in matured markets, with repeat
purchase the cost of doing business with satisfied customers
goes down. It demonstrates that the economy of scale
advantages, in manufacturing operations attained through
volume and worker experience are equally appropriate
concepts and consequences in the sales and service
environment.
It is obvious that dissatisfied customers increase the
cost of sale. They slow down in their payments, elevate
complaints to higher level management and even engage
their legal departments to fulfil their expectations. And, if
the customer engage their legal departments, the

organization must also engage its legal department,
resulting in cost escalation.
It is estimated that one dissatisfied customer takes the
profitability out of five satisfied customers. Unfortunately,
this is hidden and dispersed through out the organisation,
and therefore, not notice by top management.
Customer Satisfaction Creates Price Advantage
Unless there is a strong incentive satisfied customers
are unlikely to switch suppliers. After all, they have invested
significant amount of time, effort and expertise in searching
and selecting the right vendors in the first place. There are
minimal cost associated with switching vendors and in some
cases they can be prohibitive. For example once a customer
is linked by computerised order entry systems, it is very
difficult for him to switch to another supplier.
Therefore, if a competitor wants to capture your
satisfied customers, It must provide significantly better
value of performance or by increasing performance levels at
the same price. The larger the satisfied customer base you
own, the greater the amount of entry barriers for other
competitors.

Customer Satisfaction Limits Corporate Crisis
A third major competitor advantage through customers
satisfaction which is linked to profits, is in the area of
corporate crisis. Satisfied customers want the company to
survive any crisis it experiences and they try to assist the
company to ensure its survival. Customer satisfaction is
probably the best source of insulation against corporate
crisis.
Satisfied customers want the company to survive any
crisis it experiences, and they try to assist the company to
ensure its survival. Customer satisfaction is probably the
best source of insulation against corporate crisis.
Customer Satisfaction Encourages Successful
Innovation
Satisfied customers are more open to sharing their
product use experience. They not only allow, but encourage
suppliers to visit their facilities, talk to their employees and
in general encourage learning about what they do with your
products and services.
This open door communication and exchange is
extremely important for new product innovations. It allows
your Research and Development department to interface

with the customers as they are developing new
technologies. The customer input in the early stages of
technology development, has been recognised as one of the
major reasons for the success of an innovation.
Indeed, in many industries, customers engineering
departments take the lead in new product development
often resulting in worldwide patents.
However, the customer does not want to diversify from
his business operations and passes on the new discovery or
the new design to preferred vendor. This has been found to
be true in process technologies, in material substitutions, as
well as in support services.
Satisfied Customers Generate New Customers
The best way to grow business profitably, is to gain
new customers without significant investment of your
product, marketing, and sales resources. This is possible
through word of mouth communication. If you have satisfied
customers, they are more than willing to call or visit
potential new customers.
They are willing to put in their time and effort for
several reasons. First, they want to share their appreciation
for being treated well as customers. Second, it is in their self

interest to drive out bad companies or inferior products from
the market, by promoting your products and your company.
Finally, customers acquire market price if they
concentrate their purchases from one or two vendors. This
makes you more dependent on them and creates a balance
of power between you and your customers.
Word of mouth communication is a very powerful form
of communication and influence. It is more credible, goes
through less perceptual filters and can enhance the product
better than any sales communication. Indeed, a slight
negative word of mouth can more than offset any amount of
sales and advertising effort.
Research evidence shows that satisfied customers talk
to three other customers. However, dissatisfied customers
talk to seven other customers. Counting both positive and
negative word of mouth Communication, suggest that one
customers influences ten other customers. However, this
average of the word of mouth communication goes up
significantly more in all those purchase situations where the
potential buyers perceives a high degree risk if he or she
makes a wrong decision.
2.7.2 Summary

This chapter examined a wide range of commercial
banking activities in Nigeria, in relation to their customers.
It was disclosed that the whole essence of a business
existence is to deliver satisfaction to its customers,
considering that only when customers are satisfied that the
business can keep going. Customers satisfaction was also
linked with employees performance, revealing that when
employees are satisfied with their work, they provide better
services to customers.
This study adopts Jagdishs belief of the twin
strategies of a companys success which are Customers
satisfaction and employees satisfaction. Thus,
management should seek to satisfy customers by satisfying
their employees first.
Finally, customers satisfaction provides competitive
advantages to a firm such that satisfied customers become
loyal to the company. Therefore, such customers are
retained and new customers are attracted to the company.
2.8 Historical Background
The First Bank of Nigeria was first established as the
Bank of the British West Africa (BBWA). The BBWA was
registered in London as a limited liability company on the
31st of March 1894. The 4th of May and the month of

October in the same year in 1907 saw the opening of the
first and second branches in Lagos and Calabar respectively.
The number of branches has grown steadily since then to
over 300 branches that are well distributed around the
country and with a branch in the United Kingdom.
In 1912, the same year during which the first branch in
northern Nigeria was opened precisely in Zaria, the board
approved the takeover of bank of Nigeria, which was first
established in Anglo African Bank in 1897. This bank
happened to be its first competitor. In 1957, June, 13 th also
saw the change of its name to Bank of West Africa, by
special resolution of the board.
The banks merger with the standard bank London
commenced on 1st of March, 1966 and a special resolution
to change the name of the company to Standard Bank of
West Africa (SBWA) on 29th August, however it was
incorporated on 20th June 1969 as a Standard Bank of
Nigeria (SBN) Ltd in Nigeria. The Board resolved to change
the corporate name of the bank to First Bank of Nigeria
Limited on July 24, 1979. This took effect from October 1,
1979 and this change did not alter its equity to holding nor
its relationship with standard chartered bank. It however,
did re-establish the banks historically prominence, as the

first successfully modern bank, in the Nigeria financial
system. Exactly 11 years later the pronounce First Bank of
Nigeria Plc was formalised on the 1st of October 1960.
The bank slogan truly the first was introduced during
chief O. Adeoguns era (1987 1990) and its mission
statement was clearly defined.
The mission of First Bank of Nigeria Plc is historically
determined. Its primary objective must be to remain true to
its name at all times as the leading financial institution in
the country by providing to its customer across the nation
and beyond within parameters of regulated policies, the
best banking services available.

CHAPTER THREE
RESEARCH METHODOLOGY
3.1 Introduction
This chapter deals with the various research
techniques and methods used by the researcher. In this
chapter, the highlights of the basic research design, sources
of data collection, instrument for data collection, techniques
of data collection and techniques of data analysis, sample
size and population, sampling technique are looked at.
3.2 Research Design
According to Asika (2006), research design means
structuring of investigation aimed at identifying variables
and their relationships to one another. This is used for the
purpose of obtaining data to enable the researcher test
hypotheses or answer research questions. (Page 27)
Research design can be thought of as the structure of
research it is the glue that holds all of the elements in a
research project together. In this study, descriptive and
survey types of research are used. This is to enable the
researcher gain an in-depth knowledge of the phenomena
and to assess data for analysis and testing of hypothesis.
3.3 Population Of The Study

The population of this research however, consist of
the management and staff of First Bank Nigeria Plc. Zaria,
which comprises of 24 Staff and the numerous customers of
the bank.
3.4 Sample Size And Sampling Technique
A sample as defined by Osuala (2005) is a unit of a
defined population selected from the population with care
and precision. Here, the researcher determines how many
population members are to be included in the sample.
Having to work with the size of the population of the
company, the researcher decided to use the entire
population as the bases for the study.
The researcher made use of the entire staff population
of First Bank Nigeria Plc Zaria, which is made of 24
employees. The rationale behind using the entire population
as the sample size of the study is that the entire population
is not too large to be studied. Hence, the researcher
deemed it fit to use the entire population as the sample
size.
Also, considering the large customer base of the bank,
the researcher selected a sample size of 100 customers for
the sake of the research. To this end, a sample size of 24

(the entire Staff population) have been chosen for the
purpose of this research.
3.5 Research Instruments
To ensure authenticity of generated data, the
researcher will employ two sources of data collection
namely:
a. Primary sources
b. Secondary sources
Primary Sources
In the primary source of data, the instrument used in
the collection of data is the questionnaire. In the use of
questionnaire, the researcher posed a number of questions
ranging from personal data of respondents to leadership
style adopted by the organisation. The questions were
structured and administered to the entire population of the
bank employees and a selected sample of the bank
customers.
The researcher structured the questionnaire in such a
way that respondents were at liberty to respond to the
questions. The structured questions were to ensure that the
subject matter of the study is constantly in focus. Thus,
options were provided to guide the respondents and all that

was required of the respondents was to encode the input
option in the column provided for that purpose.
Secondary Sources
The researcher used secondary sources in collecting
some data among which were documentary records from
the case study, text books, internet and journals. The data
collected from these sources were however relevant for
literature and which also confirmed relevant points or facts
in the questionnaire.
3.6 Statistical Tools
Considering the nature of this study, two forms of
techniques of data analysis were used:
i. Tabular Analysis: This technique is informed of a
decision table. It involves the tabulation of information
obtained from data.
ii. Use of correlation and regression analysis: This
technique considers the relationship between the
variables; that is to determine the degree of
relationship between employees performance and
customers satisfaction. In determining this
relationship between the bank performance and
customers satisfaction, the researcher intends to use

the banks profit before tax within the period of 5
years( year 2005 to 2009) as the bases for the banks
performance and the customers deposits on current
account within the same period of time to represent
customers satisfaction.
3.7 Method Of Data Analysis
The tabular method of data presentation was adopted
in this research. The data were analysed using frequencies
and simple percentages to aid comprehension and easy
comparison of trends.
For the test of hypothesis, the Karl Pearsons statistical
technique was employed to determine the strength or
degree of association subsisting between the variables of
measurement under this study.
For the purpose of the analysis, the variables identified
by the researcher for assessing the impact of bank
performance on customers satisfaction are profit before tax
(as a proxy for bank performance considering that profit
before tax reflect gross performance) and Deposits on
Current Accounts (as a proxy for customer satisfaction). In
choosing these variables, the researcher considers that the
performance of the bank influences its Current Account

Deposits. Therefore, satisfactory bank performance
improves the customer deposits while unsatisfactory bank
performance results to dissatisfied customer and hence, a
reduction in the deposits by Current Account holders.
The Karl Pearsons formula for determining the
correlation coefficient is expressed as follows:
n XY X Y
r
n X 2
X 2
n Y 2
Y 2

Where:
r = coefficient of correlation
n = number of years
x = the explanatory variable (Bank performance)
y = The dependent variable (customer
satisfaction)
In an attempt towards predicting or establishing the
linear relationship subsisting between profit (X) and
customer satisfaction (y), the simple regression model was
employed. The econometric form of the model is:
Y = 0 + 1X1
Where
Y= The dependent variable.
0 = The intercept term (It gives the effect on Y, of all
other variables not included into the model.
Mechanically, it is the level of customer

satisfaction when the level of bank performance
is zero).
1 = The slope term (It gives the mean changes in Y
per unit change in X).
X = The explanatory or independent variable (Bank
performance).
Decision rule: if tcalculated is greater than ttabulated we
reject the Ho and if otherwise, we do not reject H o.
Alternatively, the P value will be applied thus:
If P < 0.05, we reject Ho otherwise, there is no enough
statistical evidence reject Ho.
3.8 Justification Of Methods Used
Taking prudence measure into consideration, it is
worthwhile to choose questionnaire as the research method,
not only for the analytical nature of the method but to
provide or obtain a first-hand data from the respondents on
the research topic.

CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
4.1 Introduction
This chapter presents and analyses the data collected.
It is divided into three parts. The first part is the
presentation of the data in a tabular form showing the
number of respondents and their percentages, analysing the
data. Part two involved testing the hypothesis while the last
part involves discussion of findings.
In order to know the true position of the services which
the bank render to customers, the extent of satisfaction
derived by customers, and the impact of bank performance
on customers satisfaction, two sets of questionnaire were
administered. One set was meant for the bank staff while
the other was for the customers.
On the whole, 124 questionnaires were distributed, out
of which 40 were dully filled and returned by customers.24
bank staff were reached but only 20 responded with the
questionnaires filled.
4.2 Data Presentation And Analysis

Table 1: Age bracket of respondents
Age No. of Percentage (%)

Respondents
25 35 10 50
36 45 6 30
46 55 4 20
Total 20 100
Source: Administered questionnaire 2010.
The above table shows that 50 percent of the
respondents are between the age of 25 35 years, 30
percent are between the age of 36 45 years, and 20
percent are between the age of 46 55 years. Thus, a
greater percentage of employees are between the age
bracket of 25 35 years.
Table 2: Staff employment Basis

Employment No. of Percentage (%)
basis Respondents
Permanent 15 75
Temporary 4 20
Contract 1 5
Probation - -
Total 20 100
respondents are permanent staff of the Bank, 20 percent are
temporary staff, 5 percent were employed on contract and
no worker was employed on probation. Thus a greater
percentage of employees were employed as permanent
staff.
Table 3: Employees length of service with the bank

Length of service No. of Percentage (%)

Respondents
Les than a year 2 10
1 5 years 9 45
5 10 years 7 35
10 years and above 2 10
Total 20 100
respondent have been working for less than a year with the
Bank, 45 percent have been working between 1 5 years
with the Bank, 35 percent have been working between the
period of 510 years with the Bank and 10 percent have
been working with the Bank from 10 years and above.
Thus, a greater percentage of the employees have been
working with the Bank between the periods of 1 5 years.
Table 4: Employees satisfaction with the condition of

service
Responses No. of Percentage (%)
Respondents
Yes 14 70
No 6 30
Total 20 100
respondents are satisfied with the condition of service of the
Bank, while 30 percent of the respondents are not satisfied
with the condition of service of the Bank. Thus, a greater
percentage of the employees are satisfied with the condition
of service of the bank.

Table 5: How regular employees come in contact with

customers
Respondents
Very regular 16 80
Not regular 3 15
Rarely 1 5
Not at all - -
Total 20 100
respondent regularly come in contact with the customers,
15 percent do not regularly come in contact with the
customers, while 5 percent rarely come in contact with the
customers. Thus, a greater percentage of the employees
regularly come in contact with the customers.
Table 6: Employees perception of customers always

being right
Respondents
Yes 18 90
No 2 10
Total 20 100
respondents agreed to the motion that customers are
always right while 10 percent went against the motion.
Thus, a greater percentage of the respondents agree to the
motion that customers are always right.

Table 7: Do you think customers enjoy preferential

treatment?
Respondents
Yes 13 65
No 7 35
Total 20 100
respondent said Yes to the motion that customers enjoy
preferential treatment while 35 percent of the respondent
said no to the motion. Thus, a greater percentage of the
respondents agrees to the motion that customers enjoy
preferential treatment.
Table 8: Do you think your bank needs to improve the

services rendered to customers?
Respondents
Yes 20 100
No - -
Total 20 100
The above table shows that the entire respondents
agreed that there should be an improvement in the quality
of service rendered to customers.
Table 9: What reason can you attribute to the delay in the

bank if any?
Responses No. of Percentage
Respondents (%)
Staff laziness 5 25
Official bottleneck 8 40
Lack of necessary 3 15
equipment

Customers incorporative 4 20
attitude
Total 20 100
respondent attributed staff laziness to delay in the Bank, 40
percent attributed official bottleneck to delay in the Bank,
15 percentage attributed lack of necessary equipment to
delay in the Bank, 20 percent attributed customers
incorporative altitude to delay in the bank. Thus, a greater
percentage of the respondents attributed official bottleneck
to the delay in bank.
Table 10: Is your branch fully computerised?

Respondents
Yes 19 95
No 1 5
Total 20 100
The table above shows that 95 percent of the
respondents agrees that the branch need to be fully
computerised while 5 percent of the respondents disagree
to the motion. Thus, a greater percentage of the
respondents said yes to the motion that the branch needs to
be fully computerised.
Table 11: Employees assessment of the degree of

customers satisfaction
Respondents
Very satisfied 6 30
Satisfied 14 70
Dissatisfied - -
Total 20 100
30 percent of the respondents believed that their
customers are very satisfied and 70 percent of the
respondents agreed that their customers are just satisfied
with the bank.
Table 12: How does the bank determine whether

customers are satisfied.
Respondents
Customers loyalty 8 40
Interview 4 20
Suggestion boxes 8 40
Others - -
Total 20 100
40 percent of the respondents determine customer
satisfaction through customers loyalty, 20 percent through
interview with customers and 40 percent of the respondents
ascertain if customers are satisfied through suggestion
boxes.
Table 13: Determining the reason for employees

commitment to the job
Respondents
Committed because 9 45
of monetary rewards
Committed because 11 55
you enjoy the work
Total 20 100

In determining why employees are commitment to
their job, 45 percent of the respondent stated clearly that
they are committed because of the monetary rewards they
get while 55 percent of the respondents were committed to
their job not because of the monetary rewards they get but
for other reasons. Such as the satisfaction they derive from
the job.
Table 14: Educational qualifications of the respondents

Educational No. of Percentage
qualification Respondent
s (%)
G.C.E./O.N.D. 4 20
B.Sc./H.N.D 13 65
Other higher qualification 3 15
(MBA, Ph.D, etc)
Total 20 100
respondents are O.N.D. holders, 65 percent are B.Sc./HND
holders while only 15 percent have other higher
qualifications such as Masters degree and doctorate.
Table 15: Length of customers patronage

Length of No. of Percentage (%)
patronage Respondents
1 11 months 12 30
1 3 years 8 20
4 years and above 20 50
Total 40 100

respondents are new customers; have been banking with
the bank for the period of 1 11 months, 20 percent of the
respondents have been banking with the bank for about 1
2 years and 50 percent (half of the respondents) have been
patronising the bank for about 4 years and above.
Table 16: Assessment of bankers relationship with the

customers
Respondents
Very cordial 20 50
Not too cordial 18 45
Not cordial 2 5
Total 40 100
As shown by the above responses, the relationship
between the bankers and customer is applaudable although
50 percent of the respondent claimed that their relationship
with the bankers is very cordial 45 percent and 5 percent of
the respondent are of the opposite view. This reveals that
there is a need for the bankers to improve on the level of
their friendliness between their and their customers.
Table 17: Customers level of satisfaction with the banks

performance
Respondents
Very satisfied 20 50
Fairly satisfied 18 45
Not satisfied 2 5
Total 40 100

The above table shows the responses of customers of
how satisfied they are with the services of the bank 50
percent claimed that they are very satisfied while 45
percent of the respondent claimed that they are fairly
satisfied, with 5 percent of the respondent not satisfied with
the banks performance.
Table 18: Banks profit and customers deposits on current

account
Year Profit before tax Deposits on Current
(Nmillion) Account
(X) (Y)
2005 15,145 264,988
2006 16,128 390,846
2007 22,097 581,827
2008 38,020 661,624
2009 46,110 1,071,836
Source: www.firstbanknigeria.com/annual-report/2009
4.3 Tested Hypothesis
Microsoft Excel Statistic package was applied to
ascertain the correlation coefficient (r), coefficient of
determination (r2) and the equation of the line of best fit.
Also, the output of the regression analysis revealed the t
statistic and the P value which were applied in testing the

formulated hypothesis at the 0.05 level of significance and
( n 2) degree of freedom.
The hypotheses are restated as follows;
H o: There is no relationship between bank
H1: There is a relationship between bank
performance and customers satisfaction.

Table 19: Correlation between Profit After Tax and Customers Deposit On Current Account
SUMMARY
OUTPUT
Regression Statistics
0.93595707
Multiple R 1
0.87601563
R Square 9
Adjusted R 0.83468751
Square 9
Standard
Error 125741.171
Observations 5
ANOVA
Significanc
df SS MS F eF
3.35136E+1 3.35136E+1 21.1966000 0.01926744
Regression 1 1 1 8 2
4743252623 1581084207
Residual 3 8 9
3.82569E+1
Total 4 1

Coefficient Standard Upper

s Error t Stat P-value Lower 95% 95%
-
19821.4439 136849.562 0.89401981 415694.940 455337.828
Intercept 7 5 0.14484112 5 6 5
20.8873729 4.53681132 4.60397655 0.01926744 6.44921451 35.3255313
X Variable 1 5 3 1 2 4 8
SOURCE: Microsoft Excel (2007) Regression Results from Data in Table 18.

INTERPRETATION OF RESULTS
(i) Multiple R = 0.955957071
This shows that there is a strong positive linear
relationship between bank performance and customers
satisfaction. In other words, both variables move in the
same direction with bank performance strongly influencing
or driving customers satisfaction.
(ii) R Square = 0.876015639
This indicates that 87.60% of the variation in customer
satisfaction is explained by variation in bank performance.
In other words, 87.60% of the changes in savings and
current accounts deposits are accounted for by changes in
the profit before taxation declared by the bank.
(iii) Adjusted R Square =
0.834687519
The adjusted R2 is computed to reflect both the
number of independent variables in the regression model
and the sample size. Hence, 83.47% of the variation in
customer satisfaction is explained by the simple regression
model adjusted for number of independent variables and
sample size.

(iv) Standard Error = 125741.171
The standard error represents a measure of the
variation around the prediction line. It is measured in the
same unit as the dependent variable Y. Hence, the typical
difference between actual annual customer satisfaction
level (Deposits and current accounts deposits) and the
predicted annual level of Bank performance (profit before
tax) is 125,741,171 millions of Naira.
(v) Observations = 5
This shows that the number of periods considered is 5.
(vi) Coefficients: Intercept =
19821.44397;
X variable 1 = 20.8837295
The regression equation: Y = 0 + 1X1
Where: 0 = The intercept term
1 = The slop term
X1 = The independent variable (Bank
performance)
Y = the dependent variable (customer
satisfaction)
Y = 19,821.440 + 20.8874x.

The Y intercept, 0, is +20.8874. This means that for
each increase of 1 unit in X, the mean value of Y is
estimated to increase by 20.8874 units. In other words, for
each increase of 1.0 increase in bank performance (i.e.,
profit before tax), the mean annual savings and current
accounts deposits (customers satisfaction are estimated to
increase by 20.8874 millions of Naira.
Decision
Using the 0.05 level of significance, the critical value
of t with n 2 = 3 degrees of freedom is 3.1824. Since t =
4.6040 > 3.1824, we reject H o. Alternatively, using the P-
value, because P-value = 0.0193 < 0.05, we reject H o and
accept H1: that there is a relationship between bank
performance and customers satisfaction. Hence, the
researcher concludes that there is a significant relationship
between bank performance and customers satisfaction.
Furthermore, the regression equation y = 19,821.4440
+ 20.8874 confirms that there is a positive linear
relationship between x (bank performance) and y
(customers satisfaction). This implies that as X increases, Y
also increases. By the same token, as X decreases Y also
decreases. Both variables move in the same direction.
4.4 Discussing Of Findings

Given the presentation and analysis of data collected,
on the research project bank performance and customers
satisfaction, the following were revealed.
1. It was discovered that the staff of the bank are
satisfied with the conditions of service as shown
in table 3. Therefore, the staff are willing to
continue rendering their services to the bank.
2. The response from the employees as shown in
table 8 indicated that there is need to improve
the services rendered to customers. The entire
respondents stood for this.
3. The research study reveals that there is
apparently delay in the bank which the
respondents attributed a greater percentage to
the official bottleneck in the organisation.
4. The response from the employees with regards to
customers satisfaction revealed that their
customers are simply satisfied, this they
determine from how loyal customers are, from
interview with customers, through suggestion
boxes, as shown in table 11 and table 12.
5. As for the reason for employees commitment to
their job, it was discovered that 45 percent of the

respondents are committed because of the
monetary rewards they received and 55 percent
of the respondents are committed as a result of
the satisfaction they derive from the job. Thus,
they are intrinsically motivated.
6. The response of customers as shown in table 16
shows that the Bank-Customers relationship is
fairly impressive. The response shows that 50
percent of customers indicated a cordial
relationship with the bank and 50 percent of the
respondents on the other hand indicated that
their relationship with the bank is not too cordial.
7. In table 17, 50 percent of the respondents agreed
that they are satisfied with the banks
performance. 45 per cent here fairly justified
and 5 percent not satisfied.
8. It was discovered that there is a relationship
between bank performance and that it is a
positive relationship. The positive relationship
connotes that an increase in the banks
performance lead to an increase in customers
satisfaction. They both move in the same
direction.

CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMEND
5.1 Summary
The research work has so far considered the topic
Bank performance and customer satisfaction. The study
was limited to the performance of commercial banks in
Nigeria using first bank Nigeria Plc Zaria as the case study.
The background of study was discussed. The problem
under study along with objectives of the research work was
stated in chapter one. The statement of hypothesis was
also stated, being the Null and Alternative hypothesis. The
scope of the research work was also stressed together with
the significance of the study.
A review of relevant literatures was undertaken to see
the view of other researchers on the subject matter Bank
Performance and customer satisfaction. A brief history of
First Bank Nigeria Pc was discussed.
The researcher adopted the survey method of research
collecting data from the primary and secondary sources.
It is thus imperative to note here that the tool for data
analysis employed was the Karl Pearsons Statistical
technique, which determines the strength or degree of
association subsisting between the variables under this

study. A brief history of First Bank Nigeria Plc was given in
chapter three.
Chapter four of the research work offers data
presentation and analysis. Analysis in this chapter revealed
some findings. Finally, the hypothesis tested shows that
there is a very strong correlation between Bank
performance and customer satisfaction and that they are
positively related. This connotes that increase in bank
performance will lead to increase in customer satisfaction
and vice versa. They both move in the same direction.
5.2 Conclusion
In view of the foregoing, the researcher wishes to
conclude that the banks performance is impressive and that
customers are satisfied with the bank. Responses from
customers revealed this.
Considering that the banking industry is characterised
by intense competition, there is need to keep customers
satisfied in order to continue surviving.
Thus, banking services can be effective if the
customers do not have to go through pains to obtain bank
services.
Most important to note is that bank performance and
customers satisfaction are positively related. This is to say

that an increase in bank performance will lead to an
increase in customers satisfaction. We can conclude that
bank performance is a major driver of customers
satisfaction. This connote that bank performance strongly
influences the extent to which customers are satisfied.
5.3 Recommendations
The research has shown that First Bank Nigeria PLC
Zaria motivates its employees and that the employees are
satisfied with the condition of service. However, the
researcher wishes to make the following recommendations.
1. Adequate and continuous training should be
given to the bank staff at all levels to enable
them improve their efficiency as regard to
services rendered to the customers and the
public in general. The bank under study is
making effort in this direction which is worthy of
commendation. Training is an important
management tool; it has to be systematic if it is
to give desired result.
2. The bank-customer relationship should be
strengthened so as to maintain the traditional
integrity of the banking profession. In this
regard, there is need for investment in customers

enlightenment programme. Booklets containing
the activities and procedures of the bank written
in a simple and straight forward language should
be made available to customers.
3. Reward for excellence be given adequate priority.
This would boost the morale of the staff and
encourage others to emulate.
4. The organisation should improve prove the
employees working conditions, knowing that
employees output largely depends on how
satisfied they are with their job.
5. The bank should at regular intervals seek for
their customers view on how effective their
performance is, and make use of such
information.
6. Service delivery should be such that it will save
customers time and energy.
7. Intrinsic motivation is highly recommended.
Rewards should not only be monetary but also
non-monetary rewards such as recognition,
responsibility etc. should be employed by the
organisation.
8. Monetary rewards should be adequate
considering the skewed nature of the economy.

BIBLIOGRAPHY
Asika N. (2006). Research Methodology in the Behavioural
Sciences; Esto printers, Lagos; Pg 27
Clark D. (2003). Linking Employees Satisfaction with

Productivity, Performance, and Customer Satisfaction.
Catalog number: CLC114T2FH
Federico (2003). Linking Employees Satisfaction with

Catalog number: CLC114T2FH
Hay Day (2003); Linking Employees Satisfaction with

Catalog number: CLC114T2FH.
http://erc.msh.org/mainpage.cfm.
http://www.eurojournls.com
http://www.ipsos.ca/prod/loyalty/newEra.cfm
http://www.qualitydigest.com
Jagdish (2003): http://www.jagsheth.net/docs/Competitive_

advantages_Through_Customer_Satisfaction.pdf
Kazmi A. (2008). Strategic Management and Business Policy;

Tata McGraw-Hill Publishing co. Ltd, West Patel Nagar,
New Delhi.
Longman Dictionary (2003).
Osuala, E.C. (2005). Introduction to Research Methodology;

B.p Limbe. South West Providence, Cameroon.
Osubor, J.U. (1984). Business finance and banking in

Nigeria, Owerri: New Africa Publishing Co. Ltd.

APPENDIX
QUESTIONNAIRE
QUESTIONNAIRE FOR STAFF OF FIRST BANK OF

NIGERIA PLC ZARIA
Instruction: Please Tick/fill where appropriate.
1. What age bracket do you belong?

25 35 [ ]
36 45 [ ]
46 55 [ ]
2. Your employment is on what basis?

Permanent [ ]
Temporary [ ]
Contract [ ]
Probation [ ]
3. How long have you been with the bank?

Less than one year [ ]
1 5 years [ ]
5 10 years [ ]
10 years and above [ ]
4. Are you satisfied with the condition of services?

Yes [ ]
No [ ]
5. How regular do you come in contact with customers?

Very regular [ ]
Not regular [ ]
Rarely [ ]
Not at all [ ]
6. Do you believe in the concept that customers are

always right?
Yes [ ]
No [ ]
7. Do you think customers enjoy preferential treatment?

Yes [ ]
No [ ]
8. Do you think your bank need to improve the services
provided to customers?
Yes [ ]
No [ ]
9. What reason can you attribute to the delay in the bank

if any?
Staff laziness [ ]
Official bottleneck [ ]
Lack of necessary equipment [ ]
Customers incorporative attitude [ ]
10. Is your branch fully computerised?

Yes [ ]
No [ ]
11. To what extent are customers satisfied with your

services?
Very satisfied [ ]
Satisfied [ ]
Dissatisfied [ ]
12. How do you ascertain the degree of customers

satisfaction?
Customers loyalty [ ]
Interview [ ]
Suggestion boxes [ ]
Others (specify)

13. Are you committed to this work because of the

monetary rewards or because you enjoy the work
itself?
Committed because of monetary rewards [ ]
Committed because you enjoy the work [ ]
14. What is your educational qualification?

a. G.C.E. [ ]
b. O.N.D [ ]
c. B.Sc./HND [ ]
d. Other higher qualification

QUESTIONNAIRE FOR CUSTOMERS OF FIRST BANK OF

NIGERIA PLC ZARIA
1. How long have you been banking here?

1 11 months [ ]
1 3 years [ ]
4 years and above [ ]
2. How would you assess your relationship with the

bankers?
Very cordial [ ]
Not too cordial [ ]
Not cordial [ ]
3. How satisfied are you with the performance of this

bank?
Very Satisfied [ ]
Fairly Satisfied [ ]
Not satisfied [ ]
4. In what areas of service do you feel that this bank

should improve on? (Please
specify)___________________________
_______________________________________________________
_______________________________________________________
_______________________________________________________
_______________________________________________________

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BANKS PERFORMANCE

SUNDAY ELISHA MANAGER

Being a Research Project to the

A Study Of First Bank Of Nigeria Plc Page ii

I hereby declare that this research project titled:

Banks Performance and Customer Satisfaction: A Study of

First Bank of Nigeria Plc has been carried out by me under

the supervision of Dr. Auwal Y. Ahmad in the Department of

Business Administration, Ahmadu Bello University, Zaria.

The information contained in the reviewed literature

and other documentary sources referred to has been duly

acknowledged in the text and the list of references

provided. To the best of my knowledge, no part of this

project report has been previously presented for the award

of any degree or diploma in any higher institution.

A Study Of First Bank Of Nigeria Plc Page iii

This project report titled: Banks Performance and

Customer Satisfaction: A Study of First Bank of Nigeria Plc

by Sunday Elisha Manager meets the regulations governing

the award of Bachelor of Science (B.Sc.) Degree of the

Department of Business Administration, Faculty of

Administration, Ahmadu Bello University, Zaria, and is

approved for its contributions to knowledge and literary

A Study Of First Bank Of Nigeria Plc Page iv

I dedicate this work to my Lord and Saviour Jesus

Christ. In the potters hand something is made out of

nothing. Thank you Father for your faithfulness, Grace and

Mercy. To God be the Glory.

To my Boss - Barrister Amos Adebayo Oriola. My story

could not have been complete without you. You gave me a

life that Im forever proud of. I am grateful for the love,

tolerance and kindness youve shown to me over the years.

I can never ever find words to thank you enough. My

children and generation unborn will hear of this great thing

youve done. You changed my story. May God bless and

reward you sir.

A Study Of First Bank Of Nigeria Plc Page v

All Glory I return to God, whose hands provided all that

I need to undergo this programme. I am nothing without

My inestimable gratitude goes to my Project

Supervisor and my best lecturer Dr. Auwal Y. Ahmad for his

time given to my work, enabling me to come out with

something meaningful. My appreciation goes to my

lecturers that impacted so much in me ensuring that we are

upright both in academics and character. Some of whom

of Department), Alh. Baba, Mal. Yakassai, Mal. Ado Garba,

Mal. Mohammed Ibrahim, Mal. Ladan, Mal. Saulawa, Mal.

Idris, Haj. Safiya Adamu, Mal. A.T. Sharubutu, Mal. Nasiru,

Mal. Aminu Gumi, Mal. Bashir Nafiu, Mrs. Helen Owolabi,

My profound gratitude goes to my Boss Barrister Amos

Adebayo Oriola. You championed my course in life. I lack

will. May you live to be proud of me (Amen).

To my parent Mr. & Mrs. Manager Hamajan for love and

care given to me from childhood to this moment, ensuring

I am also indebted to my brothers and sisters for their

love and care to me. Jafaru, Alheri, Paulina, Adama, Rosa,

A Study Of First Bank Of Nigeria Plc Page vi

Awuni, Ladidi, Biggy, Actor, Esther and finally Godffery

(late), you are my all in life.

My story will be incomplete without mentioning my

friends whom we went through the ups and down of the

campus together. Some of whom are Friday Omonu

Jonathan, Faruk Lawal (my closest pal in school), Moses

Jonathan alias legend of the Seeker (my backbone in