A study on Indian banking industry performance in pre and post merger and acquisition

Abstract

In today’s age of competition to get bigger market share, profitability and economies of scale etc., Mergers and Acquisitions have become the most widely used business strategy. The present paper is to explore various reasons of merger in Indian banking industry. This includes various aspects of bank mergers. It also compares pre and post merger financial performance of merged banks with the helps of financial parameters like, Gross Profit ratio, Net Profit ratio, operating Profit ratio, Return on Capital Employed, Return on Equity, and Debt Equity Ratio. The present paper analyses the financial performance of the selected three banks based on the financial ratios from the perspective of pre and postmerger.To analyze the impact of merger paired t-test was applied to the various financial ratios for before and after merger data. The findings received from the analysis of the pre and post merger and acquisition periods clearly shows that the banks performance is significantly good after the merger than before the merger.