Impact of Merger and Acquisition in Banking Sector: An Empirical Study

Abstract

The purpose of this research project is to investigate the many drivers of mergers and acquisitions in the Indian banking industry. This covers all the numerous facets of mergers and acquisitions in the banking industry. Financial parameters including Net Profit Margin, Operating Profit Margin, Return on Capital Employed (ROCE), Return on Equity (ROE), Earning Per Share, and Net Interest Margin are frequently used to assess the financial performance of merged institutions before and after the merger. According to a review of the literature, the majority of the work done has reduced the negative effects of mergers and acquisitions on many elements of businesses. The information on mergers and acquisitions since economic liberalization is gathered for a number of different financial parameters. The overall effect of merger and acquisitions (M&As) on acquiring banks is also examined in this study, as well as the changes taking place in the acquiring corporations on the basis of financial factors. In order to determine the statistical significance, the researcher utilized an independent t-test. This test was applied to both the ratio analysis and the examination of the impact of mergers and acquisitions on bank performance. This performance is being evaluated based on both pre-merger and post-merger factors. The study's findings suggest that the event of mergers and acquisitions (M&As) has had a positive impact on banks. These findings imply that combined banks can increase efficiency and profit through mergers and acquisitions (M&As), and distribute the profits to equity shareholders in the form of dividends.