An Analysis of Impact of Merger and Acquisition of Financial Performance of Banks: A case of Pakistan

Abstract

This study is testing the impact of merger and acquisition of banks and provides insights about their role after merger on banks profitability. In this paper six financial ratios are used for analysis these ratios are profit after tax, return on asset, return on equity, debt to equity ratio, deposit to equity ratio and EPS. Ten banks are selected as sample for analysis which gets into merger from 2007-10. 3 year pre-merger and 3 year post-merger data points are taken for all the 10 cases and their averages are compared. In SPSS paired sample T-test is applied for analysis and findings shows that only at 5% level of significance only ROE is affected by the merger and acquisition and other ratios have no impact from this strategy.

Keywords: merger, impact, financial performance, Pakistan, acquisition