A study on financial performance of selected Banks during pre& post merger and acquisition

Abstract

This study was conducted to assess the impact of merger and acquisition activities on the performance of Banks in India. The paper reviews the trends in M&A’s in Indian banking and then impact of M&A’s has been studied in three leading banks of India. The study covers the area of performance evaluation of M&A’s in Indian banking sector during the period pre and post period of six years of Merger and Acquisition activity. The paper studied the post-merger financial performance of merged banks with the help of financial parameters like, Net Profit margin, operating Profit margin, return on Capital Employed, Return on Equity, earnings per share, capital adequacy ratio, dividend per share etc. The findings indicated that strategies and policies in procedural, physical and socio-cultural contexts were very important factors in the post-merger and acquisition process. In addition, the qualitative impacts of the post M&A activities such as accounting reports, market valuations and key. The financial and accounting data for 10 banks was taken from the Financial Statement Analysis by State Bank of Pakistan. Profitability & Efficiency, Leverage, and Liquidity ratios were used to measure the financial performance, where pre and post ratio analysis was done. Results of the study show that there is no positive improvement in the financial performance of the banks in Pakistan after Merger and Acquisition.