Mergers and Acquisitions-the Game of Profit and Loss: A Study of Indian Banking Sector

-, Prof. Ritesh Patel; Shah, Dharmesh

doi:10.18843/rwjasc/v7i3/11

RW-JASC

2016

DOI: 10.18843/rwjasc/v7i3/11

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Mergers and Acquisitions-the Game of Profit and Loss: A Study of Indian Banking Sector

Prof. Ritesh Patel -¹,

Dharmesh Shah²

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Cited by 2 publications

References 29 publications

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Pre & Post-Merger Financial Performance: An Indian Perspective

Patel

2018

Journal of Central Banking Theory and Practice

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The paper compares the before and after merger position of long term profitability with respect to selected Indian banks for a period of 2003-04 to 2013-2014. The financial performance is evaluated on the basis of various variables. The study found a negative impact of merger on return on equity, return on assets, Net profit ratio, yield on advance and yield on investment. However, variables, namely, the Earnings per Share, Profit per employee and Business per employee have shown positive trend and grown after the merger. It has been observed that after the merger, the Assets, Equity, Investment and advances of all banks increases, but due to underutilization, their respective yield decreases. On a contrary, the business per employee and profit per employee have increased due to optimum utilization of human resources. By applying the Comparative Analysis, the paper also assesses the financial performance of acquiring bank with the banking industry. The Bank of Baroda and Oriental bank of commerce has found decreases in Yield on Advances and yield on investment as compared to average of all banks in the postmerger period. State bank of India & IDBI Bank has higher business per employee and profit per employee as compared to industry average.

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Pre & Post-Merger Financial Performance: An Indian Perspective

Patel

2018

Journal of Central Banking Theory and Practice

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Effectiveness of Consolidation of Bank of Baroda: An Empirical Study

Minz,

Bhowmik

2024

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Consolidation through Merger & Acquisition is not a new phenomenon in the Indian banking space. After the adoption of the Basel-III norms by the RBI in 2013, the process of consolidation became more relevant and imperative in the Indian banking sector. Under such situations, study on effectiveness of the ongoing consolidation drive has become necessary. With this end in view, the paper attempt to highlight the effectiveness of Merger & Acquisition on the profitability of Bank of Baroda. The study is based on the secondary data collected from various sources for the period 2015-16 to 2022-23. ROE of Bank of Baroda is measured by using extended Dupont analysis. Furthermore, paired t test have been applied to determine whether there exists any significant difference among the drivers of ROE during the pre and post-merger period of Bank of Baroda. The Extended Dupont analysis revealed that though there was an increase in ROE during the post-merger period; Asset Turnover and Tax Burden were found to be lower than that of pre-merger period. Paired t-test pointed out that there was no significant difference in ROE during the pre-and post-merger periods. Additionally, among the five drivers of ROE, only operating margin was found to have a significant difference during the pre-and post-merger periods. The present study will help to provide an insight into the profitability of the merger of India’s third largest public sector banks in India.

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Mergers and Acquisitions-the Game of Profit and Loss: A Study of Indian Banking Sector

Cited by 2 publications

References 29 publications

Pre & Post-Merger Financial Performance: An Indian Perspective

Pre & Post-Merger Financial Performance: An Indian Perspective

Effectiveness of Consolidation of Bank of Baroda: An Empirical Study

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