Customer Reactions to Bank M&A: Evidence from the Nigerian Banking Industry

Abstract

Reaction of customers to M&A was investigated using a mixed method framework based on two Nigerian banks in a study that aims at positioning the customer as an actor who is impacted by other M&A actors. Customer and employee narratives were quantitatively tested to ascertain impact on post-M&A customer satisfaction. Customer implications of M&A found expression through five main constructs. The inter-relationship between these constructs and post-M&A customer satisfaction resulted in a divergent-convergent spectrum of M&A-Customer dynamics.Specific findings reveal increased role for technology, but recurrent downtime hampered satisfaction. Credit reality sees objective criteria prioritized over relationship consideration. Customers’ anxiety about new lending regime did not result in any significant threat to post-M&A satisfaction. Employee commitment in the wake of M&A seems superficial. Job insecurity and stress occasioned by casualization, unrealistic targets and erosion of employee dignity resulted in fraud becoming a post-M&A consequence. Rebranding risks being construe as a vanity project. Legitimacy for the regulator rested on socio-economic stability despite reservations by some bankers. The damaging proposition for customer satisfaction by merger as compared to acquisition meant that customer impact assessment can be an alternative decision making tool in choice of growth strategy.

Keywords: Merger, acquisition, customer satisfaction, change, strategy, banking,