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The Nigerian banking industry has witnessed tremendous changes and expansion since the mid 1980s. Unfortunately the growth and expansion in the sector are not the manifestation of a sound or vibrant banking system known anywhere in the world. Most banks in Nigeria are characterized by inadequate capital base, poor services, high rate of bankruptcy, lack of management expertise, bad debt syndrome and greater exposure to fraud. In addition, many have poor database and lack of reliable information on which sound policy decision can be taken by Board of Directors. This is a fragile banking system which is waiting to explode from the contagion effects of the liquidation of over eleven banks which are technically considered distressed. Currently there are 89 banks in operation in Nigeria, with 79 being considered marginal or fringe players and with over 1,036- Fraud cases in banks in 2003 while N9.3 billion was lost through fraudulent activities.

A poor banking system of this nature creates unquantifiable problems and crisis in the economy which could result in thousands of people losing their jobs, lost of depositors’ money, lost of confidence in the banking system and above all the banks can have little contribution to the economic development of the country.

Essentially, the objectives of the new, banking sector reform through recapitalization of N25 billion for each bank intends among other things to take proactive steps to prevent an imminent systemic crisis and collapse of the banking industry, create a sound banking system that depositors can trust, create banks that investors can rely upon to finance investments in the economy to drive down the cost structure of banks and make them more competitive and development oriented and to ensure Nigeria meets minimum requirements for regional financial system integration, effectively, positioned to be a key. African regional and global player.

Taking this step is imperative for the survival of the fragile banking system in Nigeria and to be at per with the global trend. Generally speaking, the current average capitalization of banks in Nigeria is less than $10 million or N1.3 billion and with the largest bank in Nigeria having $298 million compared with the smallest Malasian bank with $526 million. This is an important indices for an understanding of the unique nature of the Nigerian banking system among developing economics.

In the study an attempt has been made by examining the fragile Banking system of Nigeria, the need for recapitalization, the various strategies by Commercial Banks to meet the recapitalization requirements and how recapitalization can enhance repositioning of Commercial Banks in competitive marketing environment of Nigeria. Although the full policy implementation of recapitalization takes effect from December 2005, this study provides an insight into the anticipated challenges of post-recapitalization era. These challenges as evident in the current mergers and acquisitions by smaller Banks provide input for academic research and analysis. In addition, it is also the intention of this study to outline the various repositioning strategies of Hallmark Bank Nigeria Plc. towards meeting the challenges of the Banking sector reforms in maintaining a leading position among New Generation Banks in meeting the CBN recapitalization requirement deadline.

It is hope that the finding of this research study would provide a pioneering blue-print for commercial banks in Nigeria to adequately cope with post-recapitalization challenges of the marketing scenario.                            


The bank was incorporated on 29th October 1990 as Hallmark Bank Nigeria Limited. It was granted license to carry on commenced business on 22nd January 1991. It commenced business on 2nd April 1991. It changed its name to Hallmark Bank Limited on 24th April 1991. It became Hallmark Ban Plc on 24th September 1996. The principal activity of the bank through out the years continued to be provision of commercial banking services such services include granting of loans and advances, project financing, trade finance activity and money market operations.

With 32 branches to date, 9 in Lagos, 3 in Oweri, two each in Aba, Port Harcourt and Abuja, One in Onitsha, Ummahia, Bonny, Awka, Enugu, Warri, Jos, Abakaliki, Uyo, Kano, Maiduguri, Benin, Otigbo and Kaduna, Hallmark Bank is expanding in line with growth strategy to position it closer to its customers and to harness the penitential of the Nigerian Market. All the bank’s branches are interconnected via Hallmark global Banking System (HGBS) to enable you access your account from any of the bank branches.

In this era of globalization, when technology offers banks enormous leverage in capturing niche markets. Hallmark Bank cannot but play in the top most segment of the Information Technology race. The deployment of the latest Information technology from the IBM stable The IBM risc model P 670 serve as a further demonstration of their desire to deliver to customers, financial services at the speed compatible with the best any where in the world.

Hallmark Bank is the second financial Institution in Nigeria to have acquired this Infrastructure. To Safeguard the equipment and direct Internet background has been installed as a first step towards launching full internet banking service later this year.

The Introduction Technology model of bank is capable of linking over 150 branches given its high reliability rating already, all their 32 branches in operation have been inter-connected.

With the issuance at the shares authorized by shareholders at the preceding Annual General Meeting, the banks paid-up capital rose to N1.0 billion in accordance with regulatory requirement. The banks authorize share capital also increased form N2.0 billion to N3.0 billion consisting of 6 billion ordinary shares of 50 kobo each in accordance with members’ approval at the same meeting. Following the same subsequent successful hybrid offer subscription and right issue of N1.3 billion and N700 million shares respectively undertaken by the bank. It’s paid up capital rose significantly to N1.87 billion. However, this figure could not be reflected in the present accounts a the proceeds were received after 31st March 2003/2004 the share holders fund of the bank rose to N8.9 b. with assets base of N48. billion at the end of 2004/2005 financial years  the share holders funds risen to over n10 billion. The bank at its 10th Anniversary celebration set a vision 2011 targeting share holders fund of 50 billion and asset base of N500 billion.

In response to the Central bank recapitalization call the board of the bank has authorize increase of the authorize share capital of the bank to N25 billion. With this level of capitalization and strategic plans put in place by the bank it now stands in goods state to pursue its future expansion and consolidation program.

The proceeds of the bank shall be deployed to finance expansion of branch network, improvement in information technology, provide additional working capital and prosecute investment in Universal banking, with this level of capitalization, the bank stands in good stead to purse our expansion programmes in the next few years.

The table below provides bridge. Information on the banks performance over the last five years.

Profit & Loss A/c


N 000


N 000


N 000


N 000


N 000

Gross Earning





Profit before taxation










Earning per share of No 50l each




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