An appraisal of treasury management practices in business banking: A case study of First City Monument Bank, Abuja
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Background of the Study
Treasury management is central to the effective operation of business banking, ensuring optimal liquidity, risk mitigation, and profitability. First City Monument Bank (FCMB) in Abuja has placed considerable emphasis on modernizing its treasury operations to better manage cash flows, investments, and financial risks. Treasury management practices at FCMB include cash forecasting, asset-liability management, and foreign exchange operations, all supported by sophisticated information systems that provide real-time insights (Eze, 2023). The bank’s treasury function plays a crucial role in maintaining the stability of business banking operations, particularly in an environment characterized by fluctuating interest rates and volatile currency markets. In recent years, regulatory changes and technological advancements have prompted FCMB to adopt more agile and data-driven treasury management practices. These practices not only help in safeguarding assets but also in optimizing returns on surplus funds, thereby enhancing overall profitability (Ike, 2024).
FCMB’s strategic investments in treasury management have led to improved forecasting accuracy and risk management capabilities. The bank has incorporated advanced analytical tools to monitor market trends and manage liquidity risks more effectively. Additionally, the integration of digital platforms has streamlined treasury operations by automating routine tasks, thereby reducing the margin for human error (Uche, 2025). However, the evolving economic landscape, combined with regulatory pressures, continues to challenge the bank’s ability to maintain robust treasury practices. The rapid pace of technological change necessitates continuous system upgrades and staff training, while external market volatility demands constant recalibration of risk management strategies. This study appraises FCMB’s treasury management practices within its business banking division, aiming to identify best practices and areas for improvement that can drive enhanced operational performance.
Statement of the Problem
Despite robust investments in treasury management, FCMB faces challenges in optimizing its treasury operations to fully support business banking functions. One major issue is the integration of new digital tools with legacy systems, which often results in data discrepancies and delayed decision-making (Eze, 2023). Additionally, the complexity of market variables, such as fluctuating interest rates and unpredictable currency movements, creates challenges in maintaining accurate cash flow forecasts. The bank’s reliance on traditional risk assessment models, which may not fully capture modern market dynamics, further hampers effective treasury management (Ike, 2024). Furthermore, the high cost associated with upgrading technology and training personnel can strain resources and impede timely improvements. These operational challenges, compounded by stringent regulatory requirements, can limit the bank’s ability to optimize its liquidity and investment strategies, ultimately affecting profitability (Uche, 2025). This study aims to analyze these issues comprehensively, providing insights into the effectiveness of current treasury management practices and suggesting actionable recommendations for enhancing operational efficiency.
Objectives of the Study
- To evaluate the current treasury management practices at FCMB in supporting business banking operations.
- To identify challenges affecting the integration of digital tools with legacy treasury systems.
- To propose recommendations for optimizing treasury operations to improve liquidity and risk management.
Research Questions
- How effective are the current treasury management practices at FCMB?
- What challenges hinder the integration of modern digital tools into existing treasury systems?
- What strategies can be adopted to enhance treasury management performance?
Research Hypotheses
- H₁: Advanced treasury management practices significantly improve liquidity management at FCMB.
- H₂: Integration challenges between digital and legacy systems negatively impact treasury performance.
- H₃: Continuous staff training and technology upgrades lead to enhanced treasury management outcomes.
Scope and Limitations of the Study
The study is confined to FCMB’s business banking division in Abuja, focusing on treasury operations over recent periods. Limitations include data access restrictions and the rapidly changing economic and regulatory environment.
Definitions of Terms
- Treasury Management: The management of an institution’s liquidity, investments, and risk exposures.
- Business Banking: Banking services tailored for commercial clients and enterprises.
Liquidity Management: The process of ensuring that an institution has adequate cash flow to meet its obligations.
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