Does Merger Affect Financial Performance of Bidder Bank in India? Evidence from Merger of IDBI and United Western Bank

Abstract

The objective of the study is to analyze and compare empirically the pre and post-acquisitions financial performance of IDBI Bank and United Western Bank Ltd. (UWB) in India and assess the impact of merger of IDBI Bank and United Western Bank Ltd. (UWB) on the efficiency of said banks in terms of different financial parameters through ratio analysis. A majority of the financial indicators of IDBI Bank and United Western Bank Ltd. (UWB) display noteworthy improvement in their operational performance during post merger period. Therefore, the results of the study reveal that average financial ratios of sampled banks in Indian banking sector showed a notable and important improvement in terms of liquidity, profitability, and stakeholders’ wealth.

Keywords: Merger, India, IDBI Bank, United Western Bank Ltd, efficiency.