Impact of Merger on Efficiency of Acquiring Bank: An Analytical Study on Merger of Bank of Rajasthan and ICICI Bank

Abstract

The paper tries to analytically evaluate the impact of merger of Bank of Rajasthan and ICICI Bank on their operating performance in terms of different financial parameters. Several financial ratios. Kolmogorov-Smirnov test,Shapiro–Wilk test,Paired Sample T test,Wilcoxon Signed-Ranks Test have been extensively used  to find out the difference in pre and post merger operational performance  of  merged entity of ICICI bank after analyzing  data for four years prior to merger and for four years after the merger .The study shows that there are significant differences between pre and post merger above mentioned financial indicators and majority of the financial indicators (13 out of 17) of Bank of Rajasthan (Target Bank) and ICICI Bank (Acquiring Bank) display significant improvement in their operational performance during post- merger period.  Therefore, the results of the study reveal that average financial ratios of sampled bank in Indian banking sector showed a remarkable and significant improvement in terms of operational efficiency, profitability, and stakeholders wealth.

Keywords: Merger, India, Bank of Rajasthan , ICICI Bank.