Merger and Its Effect on Performance of Indian Public Sector Bank: A Case Study on Merger of Nedungadi Bank and Punjab National Bank

Abstract

The study tries to assess analytically the effect of merger of Nedungadi bank and Punjab National Bank on their operating performance in terms of different financial parameters by means of Ordinary least square technique and financial ratios considering database for the period from 2000-01 to 2014-15. Most of the financial indicators of Nedungadi bank and Punjab National Bank display significant improvement in their operational performance during post merger period. Post merger regression analysis suggests that impact of various performance parameters on profitability (ROA) parameter have improved much  in comparison with entire study period’s regression analysis(both pre and post merger). It can be concluded from the regression analysis that merger of Nedungadi bank with PNB has significant impact on profitability performance of the Bidder Bank (PNB).

Keywords: Merger, India, Nedungadi bank, Punjab National Bank.