Emperical Evidence Of Performance - From Merger Of State Bank Of India And Its Associates 2017

Abstract

Mergers and acquisitions are inevitable for corporations to pursue when they want to restructure their business and become more competitive. The consolidation of banks through mergers and acquisitions constitutes an important outcome of the financial transformation process and contemporary trend in the Indian banking sector. SBI, India’s largest public sector bank merged with its 5 associate banks and Bhartiya Mahila Bank on 1^st April 2017. It is expected that with the merger SBI will enter in to the top 50 global banks in context of assets to compete in worldwide financial market. The objective of the study is to analyze the effect of SBI merger on the financial performance of bidder bank. The study is descriptive in nature and used secondary data for analysis. The data required for the analysis has been taken from the annual reports of SBI during the period 2012-13 to 2022-23 The CAMELS model is used to analyse the effect of SBI merger on the financial performance.

The result of the study reveals that the financial performance of SBI has changed significantly after merger. The bank could enhance its financial performance in terms of capital adequacy, asset quality, management efficiency, earning quality, liquidity, and sensitivity to market risk to a large extent. Now as per Forbes ranking, the position of SBI among global banks is 56 in terms of total assets. The results of the study have important practical implications and will help in resolving misconceptions regarding the implications of merger on merged entity.