Benefits of Mergers and Acquisitions in Banking Industry of Pakistan: A Case Study of Five Latest Transactions

Abstract

One of the principal objectives of merger and acquisition is to reap up the benefits of economies of scale especially in the banking sector around the globe. Over the last decade, banking sector in Pakistan has not only grown-up in term of size but also consolidated, matured and diversified to contribute towards constructing a strong financial system. The current study has analyzed five mergers cases in banking industry of Pakistan. Different variables like change in growth of capital, deposits, advances and investment pattern were taken to investigate effect of pre and post mergers. Null hypothesis was proposed as no mean difference in the values of variables of interest. On the base of empirical findings, null hypothesis was rejected and alternative hypothesis was accepted. It was concluded that latest mergers and acquisitions providing benefits to the banking sector in term of synergy. Thus, more mergers and acquisitions were recommended in future.

Keywords: Merger; Acquisition; Banks