The pre-consolidation era in the banking sector can be dated back prior to July 2004 when there were various banks existing and operating in the country. During this period, the total number of banks existing in the country was 89. After the consolidation exercise, the banking sectors was termed as being strong, stable and reliable mega bank. This is the first phase of the consolidation exercise which trimmed the number of banks in Nigeria from eighty nine (89) to twenty   five (25) and with each of the existing banks, now having and average capital of about twenty five billion (N25 billion). The consolidation programme in the banking industry is expected to have wide ranging implication on real estate profession. Because real state is character relatively with large economy size, investors have traditionally relied on third party financial instruction for significant positions of funds require the investment control of large pared of real property is difficult to achieve without access to borrowed fund which have consequently become ambiguous factor in real estate investment decision. The different source of capital from real estate investment are equity and debt, syndications joint ventures, pension fund, life insurance companies, banking industry as a sector in the economy cannot stand and operates in isolation but to associate with various industries in order to actualize its aims and objectives. Real estate industry on its own is a vibrant sector which involves various professionals from various fields. The impact which recapitalization has on real estate investment in positive funds were available, members were commissioned in carrying out valuation for different purpose and big project were also finance. 


Title page i

Certification ii

Dedication iii

Acknowledgment iv

Table of Contents v

Abstract vi


1.0 Introduction 1

1.1 Background of the Study 1

1.2 Statement of Problem 3

1.3 Aim and objectives of the study 4

1.4 Justification of the study 5

1.5 Scope of the study 7

1.6 Limitation of the study 8

1.7 Historical background of Osogbo 8


2.0 Theoretical frame work and Literature Review 10

2.1 Introduction 10

2.2 The concept of Real Estate 10

2.3 Real Estate in Nigeria 11

2.3.1 The Land Factor 13

2.3.2 Accessibility of Land 14

2.3.3 Finance for Having Development 16

2.3.4 The Building Materials Factor 17

2.3.5 The Nigeria Factor 18

2.4 The Nigerian Banking Industry 18

2.4.1 Pre-consolidation Era 20

2.4.2 Post-consolidation Era 23

2.4.3 Trends in bank consolidation 27

2.4.4 Impacts of recapitalization on banking industry 28

2.4.5 Problem associated with recapitalization 29

2.5 Effect of recapitalization on real estate market and

the Nigerian economy 31

2.6 The effect of banking consolidation and it significance 

on real estate profession 34

2.6.1 Source of capital for real estate investment 36

2.7 Relationship between Banking Industry and Real

Estate Industry 39


3.0 Research Methodology 44

3.1 Introduction 44

3.2 Target Population 44

3.3 Sample Frame 45

3.4 Sample Size 45

3.5 Sample Technique 46

3.6 Source of data 48

3.6.1 Primary source 48

3.6.2 Primary secondary source 49

3.7 Data collection and source 49

3.8 Questionnaire design 49

3.9 Techniques of analysis 51


4.0 Data Analysis, Presentation and Interpretation 53

4.1 Introduction 53

4.2 Examination of the property market prior to 

the recapitalization 55

4.3 The perception of stakeholders on the impact 

of recapitalization on the real sector 61

4.4 The result of the bank recapitalization programmes 63


5.0 Summary of Findings, Recommendations and Conclusion 68

5.1 Introduction 68

5.2 Summary of findings, 68

5.3 Recommendations 69

5.4 Conclusion 70

References 73




The trend in the Nation’s economy in this recent year particularly from the dawn of the democratic salting, the would be revealed that, this has been innovation and reforms to the various sectors of the economy most especially the banking sub-sector of the economy. This development in the banking sector is what is generally known s the bank recapitalization or bank reformation whereby the former capital base of various banks existing in the country was raised from two billion naira (N2 billion) to twenty five billion naira (N25 billion). This is by far the most profound monetary policy measure, witnessed by the banking industry in Nigeria since its interception in 1892.

The key driving force behind this policy is to transform Nigeria banks from the weak, marginal players they have been, to mega banks that would ultimately perform effetivelly in the strong global competitors. The second and equally important reason is to better position these banks to cope with the vagaries of the Nigeria operating environment and endow them with the capacity to finance major project and real sector activity like their counterparts in the advance economics. This development has made the total number of bank in the country to be reduced to just twenty five.

Estate surveyors and valuers have over the recent years been able to discharged their professional duties and services prominent among which is valuation which is a bid to establishing the values of this bank so as to facilitate the merger acquisition, consolidation, asset sharing, etc on relevant bases. In order to present a comprehensive dissertation on this topic i.e the impact of the recapitalization process on the real estate sector. There is a need to build the impact from diverse and given necessary details as may be demanded.

Real estate sector (market) is a place where bundles or clusters of right are being exchanged. It could be a system of transaction between landowner, land user and estate agents.

Real property investment is a capital formation of new asset which involves creation of real estate products such as commercial building, residential building. It can also be described in the sector ranging from commercial sector, residential sector and industrial sector etc.

Since it has been said earlier that banks from the weak. Marginal players they have been in to mega banks that would ultimately transform into strong global competitors and to better the position of these banks to cope with the vagaries of the Nigerian operating  environment and endow their with the capacity of finance major industry project and real estate sector activities.

In view of this, the project work will focus on examine, identifying analyze and recommend all necessary things as regard the impact of commercial banks recapitalization process on real professions.


In Nigerian today, research has shown that real estate sector face some challenges, which has posed problem or set back in the sector. Some of the challenges are lack: of adequate funding, high cost of building, heavy reliance on imported items and costly housing design, low returns from real estate. Since real estate is characterized by relatively large economic size, investors have traditionally relied on third party financial instruction for significant positions of fund required for investment. Control of large parcel of real property is difficult to achieve without access to borrowed fund, which have consequently become ambiguities factors in real estate investment decisions.

 Banking sector, which was the major source of development finance, reneged on it role of financing sustainable economic development by rather supporting the import dependence nature of the economy. Most of the revenues generated by bank before consolidation to the highly fragmented nature and the weak capital base of Nigerian commercial banks as at that time.

In doing this, certain questions become imperative; what is really meant by recapitalization? Why recapitalization? What are the machineries put in place? What was the state of banks in the pre-consolidation era? What was the state of banks in the post consolidation era? What is the relationship between banking industry and real estates sector? What are the impacts of the reform on real estate sector? What are likely shortcomings or challenges of this reform on real estate and banking industry? What are the probable solutions? So this project work is faced with challenges of proffering solutions to some problems that arise in the process of commercial bank recapitalization with emphasis is real estate sector.


The aim of this study is to evaluate the impact of bank recapitalization in real estate sector of the economy.


- To examine the real estate market prior to the process of recapitalization.

- To assess the recapitalization of the affected banks in the study area

- To examine the impact of recapitalization on the real estate sector

- To identify the problems of the recapitalization on the real estate sector and to suggest possible solutions.


Property (real estate investment in any given country involves large sum of money or capital commitment and also takes a long time to complete when compared to other forms of investment. The general economic condition of country is one of the major determinants of the level rate of real estate investment. The issue of incurring base now becomes a necessity in the development of real estate. The capital could be gotten from equity finance that is, from one’s saving, profit drawn on other business that are capable of carrying out development, including ways in which income would be earned without incurring debt. The other sources of development finance is gotten from debt finance, which ensures a liability on the developer to a second party that could be termed the financial on investors. As compared with equity finance where the developer is the investor to the land finance e.g from friends, banks, financial, institution, trust and bonds, property companies, government, pension funds and insurance etc of al sources of debt financing in Nigeria, bank and other financial institutions seem to be the largest dominating factor on real estate financing.

The property and development, gazette (1991) recognizes that without a well-organized and efficient housing finance system. It is difficult to mobilize substantial financial resources for channeling funds in to the real estate sector.

In the light of this, various works have been concerned with the problem of banking industry in Nigeria economy from a broad view Oboh G.A.F (1991), carried out a research work on banking and Nigeria economy. Contemporary issues in the Nigeria banking system. However, during the time they were carrying out the research, the banking sector, which was the major source of finance reneged on its role of financing sustainable economic development by rather supporting the import dependence nature of the economy.

Most of the revenues generated by banks before the recapitalization program was import business related. This was largely due to the highly fragmented nature and the weak capital base of Nigerian commercial banks as at that time.

Therefore, this study seeks to establish link between the reforms initiated by the central banks of Nigeria (CBN) and the accessibility of real investor to finance in order to ensure better performance and this, reduce the problem of real estate to the barest minimum.


This project work sought to establish the impact of recapitalization programe on real estate sector in Nigeria. However, as a result of time constraint, the writer limited the scope of this study to Osogbo.

Ideally, the study was supposed to embrace all the banks that were recipients of the recapitalization exercise and that are situated in Osogbo as well as the estate firms involves in the real estate practices, but the writer decided to focus on a random selection of the estate firms registered under estate surveyors and valuers registration Board of Nigeria (ESVARBON) and some banks that survived the recapitalization exercise.


In the course of carrying out the research work, the following were the challenges encountered by the researcher.

There was the challenge of time constraints in which case, there was limited time to carrying out this research work, in the same vein, there was also the constraint of funds to carry out a very thorugh research work. There was also the challenge of retrieving all the questionnaires administered to these respondents and nonchalant attitude from the respondents.


In Yoruba mirth, Osogbo as a historical town was founded by Osun a river of goddess and wife of legendry king Sango of the ancient Oyo Empire Osogbo’s prominence as an important tourist attraction stems from the Osun River where the Osun grooves and shrine are both located. As early as 1929’s Gesman Art connoisseurs stated flocking to Osogbo to afford themselves of the fertile Osogbo art in Textile design and fertility frame evidence in sympathetic magic in the Osun goddess. Little wonder, Osogbo is praised as Osogbo Ilu-aro, Oroki asala, “Osogbo the town of dye, Oriki the one that embraces all”

Notable among these Germans Swan Wenger who was the moving figure behinds the imbari art movement was a training ground for performing literary and visual artistes who were later bestrode the artistes framament like colluses. 

The point being chorused is the fact that Osogbo has always played lost to visitors and thus have compelled the need for terminal expansion and accommodation beckoning. At another level, with the contact of British colonial administration, Osogbo became a prominent town as the capital of Osun division which was home to the colonial representatives in the area.

To crown it all commerce becomes centred in Osogbo with the coming of J. B Olivant, Peterson Zochonis and Royal Niger company later UAC, Mr. Bigg’s, Species and enactment of Banks like bank PHB, Spring, Intercontinental bank, Pacific, UBA, Zenith all extended there merchandize tentacles in the city.

The coming of Railway and sitting if terminus at Osogbo also share up into the compelling housing need at the city. By the way, employees of various government and non-government organizations settled down in Osogbo and necessitated an accelerated, affordable medium size low income housing need.



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