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An Analysis of the Impact of Mergers and Acquisitions on Commercial Banks Performance in Nigeria
Olagunju Adebayo,Obademi Olalekan
Pakistan Journal of Social Sciences , 2012, DOI: 10.3923/pjssci.2012.139.146
Abstract: Mergers and Acquisitions (M and A) in the corporate world are achieving increasing importance and attention, especially with the advent of intense globalization. This is evident from the magnitude and growth of deal values and resultant mega-mergers transacted in recent times. This research work attempts to assess the implication of merger and acquisition of commercial banks in Nigeria on their profitability and other associated measures of performance. The research analysis used published audited accounts of ten out of twenty-four banks that emerged from the consolidation exercise and data from the Central Banks of Nigeria which consists of both primary data. The relevant data collected were analyzed and tested using simple percentage and tables. Subsequently, the three hypotheses formulated in this study were tested using correlation co-efficient (r2) and t-test. The result of the analysis revealed that there is significant relationship between pre and post merger/acquisition capital base of commercial banks and level of profitability, there is significant difference between pre and post-merger acquisition earnings per shares. Merger/acquisition have also, increased the capitalization of commercial banks with evidences of changes in company s share ownership, increase in the cost of services and changes in bank lending rates. Based on these findings, it can be concluded that the merger and acquisition programme has improved the overall performances of banks significantly and also has contributed immensely to the growth of the real sector for sustainable development.
Mergers and Acquisitions in the Nigerian Banking Industry: An Explorative Investigation
Appah Ebimobowei,John M. Sophia
The Social Sciences , 2013, DOI: 10.3923/sscience.2011.213.220
Abstract: The study was designed to examine mergers and acquisitions in the banking industry in Nigeria. The need to carry out this study arose from the challenges faced by Nigerian banks despite the reduction of banks from 89-25 at the end of 31st December 2005. These current challenges faced by banks in the country have made researchers to question the efficacy of the consolidation of banks in Nigeria. The explorative research method was used for this study. Data was collected from journals, textbooks, conference papers and the internet. The findings reveal that the consolidation (mergers and acquisitions) activities in Nigeria did not meet the desired objectives of liquidity, capital adequacy and corporate governance which have resulted to more troubled banks after the consolidation. On the basis of these, the study recommends among others that corruption, fraud and insiders abuses must be minimized in the banking industry for the country to derive the benefits of mergers and acquisitions of banks.
Mergers & Acquisitions and Efficiency of Financial Intermediation in Nigeria Banks: An Empirical Analysis  [cached]
Oladepo David Elumilade
International Journal of Business and Management , 2010, DOI: 10.5539/ijbm.v5n5p201
Abstract: The value gains that alleged to accrue to the large and growing wave of merger and acquisition activity have not been verified. Thus leading the research community in quandary on whether the industry has followed a path of massive restructuring on a misguided belief of value gains or whether the financial regulators and operators are lying to the public and shareholders about the effects of their activity on shareholders value and banking performance. It is important to address this issue by reconciling data with empirical reality of continued merger and acquisition activity. This paper fills the gap by investigating the effects of mergers and acquisitions on the efficiency of financial intermediation in the Nigerian banking industry. This is carried out by estimating a model that incorporates some key financial variables in a model that regress interest rates on these financial variables. Two models are estimated: one for the lending activity and the other is for the deposit activities. The model for lending activity has interest rate on loan as the dependent variable and deposit rate represents the dependent variable in the deposit model. The study found evidence to support the thesis that the consolidation programme-induced mergers and acquisitions in the banking industry had improved competitiveness and efficiency of the borrowing and lending operations of the Nigerian banking industry.
An Analysis of the Efficiency Effects of Mergers and Acquisitions in the Nigerian Banking Industry
Appah Ebimobowei,John M. Sophia
Pakistan Journal of Social Sciences , 2012, DOI: 10.3923/pjssci.2011.135.141
Abstract: This study focused on the efficiency effects of mergers and acquisitions in the Nigerian banking industry. Data was collected from the financial statements of all the sampled banks within the study period. The population of the study comprised all the (24) banks operating in the Nigerian banking industry as at 31st December 2010. Simple random sampling technique was used to select the (10) banks used for the analysis. About 3 year (2003-2005) pre merger and acquisition mean return on equity was compared with the 3 years (2006-2008) post merger and acquisition mean. Using descriptive analysis and paired sample t-test statistics, the findings revealed that there is no significant difference between the return on equity of banks pre and post merger and acquisition. On the basis of the findings, we recommend among others that mergers and acquisition in the banking industry in Nigeria must be driven by market forces to give room for efficiency and effectiveness and researchers should develop new framework and models for banks performance, stability and growth as opposed to merger and acquisition.
The Human Resource Management Challenges of Post Consolidation Mergers and Acquisitions in Nigeria s Banking Indsutry
T.M. Fapohunda
International Business Management , 2012, DOI: 10.3923/ibm.2012.68.74
Abstract: This study examines the human resources challenges of the post consolidation mergers and acquisition in Nigeria s banking industry. The industry went through structural changes which has posed great human resources management challenges. The study adopted the survey research design. A sample of 115 respondents was selected from six of the banks that merged to become two. The simple random sampling technique was used in the selection of sample elements. The instrument for data collection was the questionnaire. Four hypotheses were tested. The hypotheses tested indicated a relationship between the mergers and acquisitions and productivity, job security, labour turnover and level of level of technological innovations. The implementation of the consolidation policy induced a shake-off in the industry which infused a new set of human resource challenges in the sector; some of which include those of job-cutting, outsourcing, downsizing, rightsizing, incompatibility in technologies, equipment or corporate culture. The study posits that human resource is an essential part of mergers and acquisitions and should be given adequate emphasis throughout the processes of mergers and acquisitions. Intended objectives may not be achieved when human resources factors are overlooked. For successful integrations, it is imperative that merger talks and negotiation should go beyond the balance sheet figure to an in-depth understanding and evaluation of cultural compatibility that will promote the realization of the objectives. With the emergence of mega-banks employees must be given necessary training and skill development for the current level of activities in today s banks.
Short Term Effect of Consolidation on Profitability of Nigerian Banks
M.R Sanni
African Research Review , 2010,
Abstract: Has the 2006 consolidation of banks in Nigeria led to a significant change in the profitability [Earning Per Share (EPS)] of the banks? This paper examined the EPS of 13 out of the 25 post consolidation ‘mega’ banks. The banks examined are those that fairly retained their identities before and after the consolidation exercise. The three-year (2003-2005) pre consolidation EPS mean of the banks was compared with the three-year (2006-2008) post consolidation period. Using descriptive statistical method, the combined EPS of the banks changed but not significantly at 5% significant level when a paired sample t-test statistical method was used. Three of the banks however stood out. The change (an increase) in the EPS of two of them is significant while the change (a decrease) in the third one is also significant not only at 5% but at 1%. The findings here confirm the existing controversy on whether or not mergers or acquisitions lead to improved profitability. What is however clear is that barring any effect of the present global economic meltdown; it may take some time for the EPS of most of the banks to change significantly. Key Words: EPS Profitability Consolidation
The Impact of Mergers and Acquisitions on the Performance of the Greek Banking Sector: An Event Study Approach
Panagiotis Liargovas,Spyridon Repousis
International Journal of Economics and Finance , 2011, DOI: 10.5539/ijef.v3n2p89
Abstract: This paper examines the impact of Greek mergers and acquisitions on the performance of the Greek Banking Sector during the period 1996-2009. With the use of event study methodology, we reject the “semi-strong form” of Efficient Market Hypothesis (EMH) of the Athens Stock Exchange. We find that ten days prior to the announcement of a merger and acquisition, shareholders receive considerable and significant positive cumulative average abnormal returns (CAARs). Also the results show that significant positive CAARs are gained upon the announcement of horizontal and diversifying bank deals. The overall results indicate that bank mergers and acquisitions have no impact and do not create wealth. We also examine operating performance of the Greek Banking Sector by estimating twenty financial ratios. Findings show that operating performance does not improve, following mergers and acquisitions. There are also controversial results when comparing merged to non-merged banks.
Mergers and Acquisitions: An Efficiency Evaluation  [PDF]
Paulo Rotela Junior, Paulo Rotela Junior, Edson de Oliveira Pamplona, Aneirson Francisco da Silva
Applied Mathematics (AM) , 2013, DOI: 10.4236/am.2013.411213
Abstract: This article sheds light on how synergies arise through mergers and acquisitions (M&A). Enterprises go through the process of Mergers and Acquisitions (M&A) with the goal of improving performance, increasing efficiency and obtaining business synergy. Prior literature suggests that synergies could arise due to taxes, market power or efficiency improvements. This study evaluates the efficiency of M&A in Brazil among publicly-traded companies. We used models with multiple objectives from Goal Programming and Data Envelopment Analysis (GPDEA), employing accounting indicators as input and output variables, and thus evaluated the emergence of synergy gains. These models allow us to analyze and classify the M&A according to the efficiency obtained in such processes. Some of the M&A cases analyzed were mistakenly considered efficient when used traditional models. And, as expected, the GPDEA was proved to be superior to classical models; however it was noticed that few of the cases investigated were proved to be effective. We presented a new application for multi-objective approach that can be used to assess mergers and acquisitions. The dualapplication of GPDEA provided a greater understanding of efficiency generation in synergy creation by means of M&A.
AN OVERVIEW ON THE DETERMINANTS OF MERGERS AND ACQUISITIONS WAVES  [PDF]
Vancea Mariana
Annals of the University of Oradea : Economic Science , 2012,
Abstract: This paper concentrates on the presentation of the economic dimension of the mergers and acquisitions from a macroeconomic perspective. Thus, the objective of this paper is to reveal the main drivers of merger and acquisition activity. These operations take place in waves, which enters the context of changing the competition game marked by economic changes, technological evolutions, changes generated by the phenomenon of globalization, and by regulating changes. On the other side, a series of studies in the literature argue the existence of a connection between evaluating the securities and the merger and acquisition activity. This research is based on a systematic, logical and comparative analysis of scientific literature regarding the macroeconomic determinants of mergers and acquisitions.
Success Factors of the Companies Mergers and Acquisitions
Maria Sierpińska,Robert B?k
Contemporary Economics , 2007,
Abstract: Mergers and acquisitions (MA) are one of the most important phenomenons influencing dynamics of the world economy growth. At the same time, big number of acquisitions turns out to be unsuccessful which induces one to examine reasons for failures and factors having influence on success of MA. In the article an attempt to systematize researchersí and specialists-practitionersí opinions on factors that play a key role in acquisition success was made, as complexity of MA processes causes that only actions resulting from reliable analysis, that are afterwards well planned and carried out may bring results expected by the entities.
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