This research work was conducted to examine Treasury management strategies and challenges in the Nigeria. Banking industry, identifying the various types of bank treasury products, their challenges and the strategies applied by difference banks in marketing their new and existing treasury products. The study analyses the treasury management responsibilities assumed by financial departments and develops a model to confirm those responsibilities. The study has also developed an explanatory model that brings together the man functions of the treasurer by means of two concepts: (i) basic cash management, which group the management of collections and payments, liquidity monitoring in banking operations, short term treasury forecasts, management of banking balances on value data and negotiation with financial organisation; and (ii) “advanced cash management”, which includes the management of the financing of the positioning of treasury peaks and the management of financial risks. 


Title Page - - - - - - - - i

Approval Page - - - - - - - - ii

Dedication - - - - - - - - iii

Acknowledgment - - - - - - - iv

Abstract - - - - - - - - - v

Table of Contents - - - - - - - vi


1.0 Introduction - - - - - - - 1

1.1 Background of the Study - - - - - 1

1.2 Statement of the Problem - - - - 2

1.3 Objectives of the Study - - - - - 3

1.4 Research Question - - - - - - 4

1.5 Statement of Hypothesis - - - - - 4

1.6 Significance of the Study - - - - - 5

1.7 Scope of the Study - - - - - - 6

1.8 Limitation of the Study - - - - - 6

1.9 Definition of Terms - - - - - - 7


2.0 Literature Review - - - - - - 9

2.1 Introduction - - - - - - - 9

2.2 Objective of Treasury Management - - - 13

2.3 Treasury Management Policy/Guideline - - 15

2.4 Interest Rate Forecasting and Management - 17

2.5 Methods of Pricing Instrument by Treasury

Officers --------20

2.6 New Treasury Product Development - - 22

2.7 Financial Market Information Gathering and 

Analysis --------27

2.8 Challenges Encountered by Banks on 

Managing There Treasury Products ---  29


3.0 Research Design and Methodology - - - 32

3.1 Introduction - - - - - - - 32

3.2 Research Design - - - - - - 32

3.3 Sources/Methods of Data Collection - - 32

3.4 Population and Sample Size - - - - 35

3.5 Sample Technique - - - - - - 36

3.6 Validity and Reliability of Measuring 

Instrument -------37

3.7 Method of Data Analysis - - - - - 37


4.0 Presentation and Analysis of Data - - - 39

4.1 Introduction - - - - - - - 39

4.2 Presentation of Data - - - - - 39

4.3 Analysis of Data - - - - - - 40

4.4 Test of Hypothesis - - - - - - 51

4.5 Interpretation - - - - - - - 55


5.0 Summary, Conclusion and Recommendations - 56

5.1 Introduction - - - - - - - 56

5.2 Summary of Findings - - - - - 56

5.3 Conclusion - - - - - - - 58

5.4 Recommendation - - - - - - 61

References -------64

Appendix -------- 67




Treasury function emerged as a result of the sophistication of banks. After the recapitalisation of banks capital to N25 billion in 31 December, 2005 due to increasing competition, Banks have initiated a lots of product to enhance their treasury function, knowing that treasury product which is an important aspect of banking activities especially as Banks operate at the short end of the financial market known as money market. Indeed treasury function is a critical tool for controlling liquidity. Interest rate and off balance-sheet risks, loans deposits, borrowed fund pricing and the execution of assets and liability management policies. 

Management of bank treasury comprises fund acquisition, investment in marketable securities, hedging and the management of the bank’s reserve account at the central bank. for a bank to be remain profitable and also be able to manage their liquidity position, such bank should develop treasury management strategies needed to compete with other banks in the industries, they should also develop and market new treasury product which will enhance their liquidity and profitability position. 

Banks when trying to manage its treasure products faced many challenges which may come from customer when deciding on going to the other bank that they can understand their treasury product or collect prime interest rate. Another challenges may be from the regulatory authorities (CBN) by trying to regulate the liquidity position of commercial bank initial new policy guidelines which all banks must comply with. These and other are the are which the researcher will cover in the conduct of this research work. 


1. The treasury management and inadequate liquidity has recorded some initial failure on Banks. 

2. The evolve of Union Bank Plc to make phenomenal profit, by making them to be careless or resources utilization and particularly their treasure management. 

3. The inadequacy for the management strategies holding by banks. 

4. The inability of the Union Bank Plc and UBA Bank Plc to fulfil both its short and long term obligation, it is based on the management of liquidity. 


The under-listed point generally make up the objectives of the study, they are as follows: 

a. To investigate the various techniques it treasury management in UBA Plc and Union Bank Plc and also identify peculiar problems in the management of treasury products. 

b. To find out, it the banks have initiated new strategies in marketing and management of their treasury products.

c. To find out the challenges encountered by banks in managing their treasury.

d. To find out how the banks are monitored and supervised on CBN general policy guidelines. 


The research question for this work is stated below: 

1. Can management of bank treasury be a critical tool for controlling it’s liquidity?

2. Does management of the bank’s reserve account at CBN means managing the bank’s balances in required reserve account?

3. Can marketing of bank treasury product be an important aspect of banking activities?

4. Is new products developments the basic funding strategies in banking?

5. Can management of bank treasury help in economic development? 



Ho: There is no relationship between the commercial bank total assist and her level of profitability.

HA: There is relationship between the commercial bank total asset and her level of profitability. 


Ho: There is no significant relationship between a treasury management and bank investment. 

HA: Thee is significant relationship between a treasury management and bank investment.  


Treasury function which is the critical tools used by Banks to manage their liquidity position, will help the banks to be able to know the new strategies used by their competitors to manage their treasure products. 

It will also help the regulatory authority (CBN) to regulate the monetary policy thereby enhancing economic development. 

Academically, it will be one of the sources through which student and or researcher would understand the difference forms of treasury, products, the strategies used by banks to manage their treasury effectively and efficiently, and also help them to do more research work on management of bank treasury.


The researcher intends to know how the banking industry management their treasury function because treasury management which is know as the critical tool used by banks to management their liquidity position. By knowing when to invest short, medium or long – term and also the amount of cash to reserve in their vault. 

In carrying out this research work, the researcher will specialize in two Banks i.e. Union Plc and UBA Plc as areas covered in this research work, which the finding, conclusion and recommendation will cover the entire system. 


One of the major limitation is time constraint since the project is expected to be completed within a short period of month.

Another limitation is lack of statistical data and literature to review for the project work financially constraints is also one of the limitations. 

Furthermore, because of oath of secrecy sworn by the bank officials and fear of divulging vital information to their competitors, some staff members of Union bank and UBA Plc found it difficult to release necessary information for this work. This did not , in any way affect the validity and reliability of this project because the researcher painskakingly ensure that all relevant fact on ground were investigated. 


1. Analysis: To study in detail by breaking it down into various parts, to submit s to certain test order to identify its constituents to break up into its simplest element. 

2. Bank: This is a financial institutions that provides banking service. 

3. Control: A credit policy package should have in build monitoring device for comparing the actual result with the policy guidelines. This can be achieved by specifying a number of commercial returns to be rendered periodically. 

4. Comparative: Having to do with comparison or comparing what is similar and different in two or more branches of knowledge measured or judged by company. 

5. Hypothesis: This is an assumption, which the person carrying out an investigation on a particular to made ahead of time, before embarking on the investigation. The hypothesis could be negative or alternative (positive) hypothesis. 

6. Management: This simply means getting things done through other people. 

7. Policy Guideline: This is the totality of the rules, procedures and processes, which the management and bank adopts to guide them in their duties. 

8. Target Market: This refers to care customers of the bank. 

9. Loan: A loan is a credit facility extended by one party (Lender) to another party (borrower), subjected to specific terms and condition agreed to both parties.    



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