Financial performance of banks in Pakistan after Merger and Acquisition (original) (raw)
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Analysis of Pre and Post Merger and Acquisition Financial Performance of Banks in Pakistan
Information Management and Business Review
Merger and Acquisition is a strategy adopted by the organizations globally to meet the needs of dynamic business environment. This strategy also has much importance in Pakistan mostly in banking sector. Therefore, the objective of the study is to assess the impact of M&A on the financial performance of banks in Pakistan. The accounting and financial data of 10 banks were used in this study. Data was taken from the financial statement analysis (FSA) by State Bank of Pakistan from the period of 20062011. For the analysis of pre and post Merger and Acquisition performance 15 financial ratios were used in the study. To compare the results Paired sample t-Test was used to measure the significant difference between pre and post M&A financial performance. The overall results show that there is no significant difference in financial performance. It is concluded that there is insignificant difference between pre and post M&A performance of banks in Pakistan.
Mergers and Acquisitions: Effect on Financial Performance of Banking Institutions of Pakistan
2014
Mergers and acquisition turn out to be the main source in the dynamic environment. Organizations now face the domestic and international competition due to globalization and liberalization in the corporate world. This study is conducted to find out the influence of business combinations on financial performance of acquiring banks in Pakistan. In this paper the post-merger financial performance of Pakistani acquiring banks is measured by using financial and accounting ratios analysis. Sample of this research consists of eleven banks involved in the process of merger and acquisition during 2006-2010. Three years before and after-merger data is used to test the significance of study. Paired sample t-test statistics and Data Envelopment Analysis tools is used with the help of statistical software SPSS. The results of this study show that Pakistani banks are no different than the banks in other parts of the world. On the basis of findings, it is concluded that financial performance of ac...
Mergers & Acquisitions and Banks Performance in Pakistan
Pakistan is one of those developing countries in which law and order and security issues are the major problems. Economic conditions are not ideal due to which many firms are doing merger and acquisition to improve their financial performance. Our research study has tried to measure the affect of these merger and acquisitions on the financial performance of the banks in Pakistan. The main objective is to check whether merger and acquisition in banks of Pakistan has increased their performance or not. Merger and acquisition is the independent variable whereas financial performance is the dependent variable. Financial performance is determined through liquidity ratios (DTA, CTA), profitability ratios (ROA, ROE) and solvency ratios (D/E, DR). Data is collected from annual reports of the banks. Only those banks are included which are listed in the Karachi stock exchange in Pakistan. Our results showed that performance of mostly banks increased after merger and acquisition but it is not true for all the banks which reveals that banks should consider more information and detailed analysis should be done before doing merger and acquisition in Pakistan. Results of this research would also help to different stakeholders like researchers, investors, creditors, employees, bankers etc in understanding the importance of merger and acquisitions.
The Impact of Merger and Acquisition on Bank Performance: A Case of Pakistani Banking Sector
Global Social Sciences Review, 2019
Merger and acquisition is the strategy used by banks to expand its development process. In the current study operating and market performance has been assessed of the Banks exercised the M&A by taking the data from 2005-17. The main focus of the study is to evaluate the Banks performance using data collected from nine banks gone through the merger and acquisition strategy with the help of ordinary least square model. The results show significant relationship operating performance but insignificant relation with market performance. Findings provided an opportunity for the Banks to study and utilize the M&A strategy for capturing market share and further development in the competitive market. Furthermore, a glimpse for potential investors has been provided who want to create a profitable portfolio according to market concentration. The implications demands that proper improvement should be considered for the mechanism and regulatory policies to ensure the security of Banks.
Impact of Mergers and Acquisitions on the Performance of Commercial Banks in Pakistan
Journal of Poverty, Investment and Development, 2015
The objective of this research study is to examine the impact of merger and acquisition on performance of banks. This study is basically a quantitative research to give an insight into the trends that has increased the merger and acquisition. An empirical investigation has been done to study the patterns of merger and acquisition in banking sector of Pakistan. Past studies focused mainly on the developed countries and there is less work done on merger and acquisition in less developed countries like Pakistan. For the purpose of data collection annual reports are used. To evaluate the effect of M&A on the profitability of banking sector of Pakistan data is collected from the KSE (Karachi stock exchange). The dependent variable is performance of bank and independent variable is merger and acquisition.
While facing the challenges of globalization and technological advancements, firms consistently aspire to gain a competitive edge over their adversaries. The objective of this study is to investigate whether mergers and acquisitions improve the financial performance of acquirer banks. For this purpose, data is collected from eleven banks listed on Pakistan Stock Exchange (PSX) that underwent the process of merger and acquisition between 2009 and 2012. The financial performance of these banks is analyzed with the assistance of financial ratios. Additionally, paired sample t-test is applied on the ratios to find out the statistics whether significant or not after the enhancement of the banks' financial performance. Out of the six financial ratios, only three financial ratios showed significant change. Furthermore, two ratios improved, while one ratio deteriorated. The remaining three ratios were not statistically significant. Thus, this paper is useful for firms, financial organizations and banks since it provides information that would help them make informed financial decisions.
Do Mergers and Acquisitions Vacillate the Banks Performance? (Evidence from Pakistan Banking Sector)
Abstract Today economy of Pakistan is facing the financial, security and political problems due to which its economic growth badly disturbed. This research has been conducted to analyse either merger and acquisition increased or decreased the performance of Pakistani banks. Secondary purpose of this research paper is to provide information to bankers, government authorities, banking employees, investors and other stake holders. It also helps to the new researchers through its literature. Financial ratios such as profitability ratios (ROA,ROE...) liquidity ratios(DTA,ATD,CTA), investment ratios (ROI, EPS) and solvency ratios (DE, IC, DR) are used to analyze the impact of Mergers and acquisitions (M&A) on banks performance in Pakistan. After analyzing the merger and acquisition literature and financial ratios results it is found that not all banks which go through deal of this process (M&A) and they have not shown significant enhancement in performance and gain on equity when compared to their performance before the deals. Additionally, it is concluded that M&A have negative relationship with banks performance in Pakistan and it is suggested to Pakistani banking corporations that they should make feasible financial analysis before going to M&A deal. This research relied much on the publically available data for a sample of Pakistani Banks listed in Karachi Stock exchange. It is difficult to collect data of mergers and acquisitions of banks before 2006 and implementation of quantitative analysis. This study results will apply in Pakistan financial sector or in those developing countries which financial environment is same as Pakistan. This study is useful for the banks, employees of banks, Proprietors, Government authorities, insurance companies and manufacturing firms. These above mentioned organizations can developed their capabilities to deal with equitably and effectively to solve the social professional problems of affecters. The value of paper easily identified through its topic, it is not only a specific study of Pakistani banking performance but it may leads toward knowledge about all developing countries banking performance. It may be the first kind of paper that offers evidences on the M&A impact on Pakistani banks profitability which uses a lot of ratios and banks have been used. This study provides useful information that keeps the great value for decision makers (management), businessmen, academics and other stakeholders. Key words: Merger & Acquisition, financial ratios, financial institutions performance, Pakistan.
Revista Amazonia Investiga, 2021
The competition among corporates to become market leader is not only with in economy but also it is global and it effects the organizations in a positive or in a negative way as well in such a challenging and rapid environment Merger & Acquisition (M&A) is one of the best ways to enhance the capital, customers, and profitability. This paper is based on the CAMEL (Capital Adequacy, Asset Quality, Management Soundness, Efficiency and Liquidity Ratios) framework. Overall, twenty-five ratios before and after merger included on nine year pre and nine-year post were collected/ calculated and analyzed with SPSS and E-Views. Paired Sample T test were calculated and analyzed with the use of SPSS and structural break down test with the use of E-Views. The research after testing and analysis with software conclude that banks in long run shows significant difference in Capital adequacy ratios and Asset Quality and shows better Capital Adequacy and Asset Quality Ratios after merger among the fiv...
Al-Aijaz Research Journal of Islamic Studies & Humanities, 2021
Mergers and Acquisitions (M&A) are known as one of the major useful practice and strategies for market development, market penetration, extension and growth of the firm. (M&A) strategies have commonly used and adopted in all over the world, these (M&A) practice also adopted in Pakistan by many firm, recently in telecommunication sector (M&A) adopted by Mobilink and Warid Telecom. This study purposes to evaluate and analysis the impact of (M&A) on Islamic banking if commercial bank merged with Islamic Bank by using the analysis of event study for the period of 2011 - 2017, In this paper Meezan bank limited data also analysis and Meezan bank limited result set as industry bench mark. Our findings indicate that merger of the company no relation or very week relation with Profitability.
Effectiveness of Pakistani Banks after Merger and Acquisition
International Journal of Economics & Management Sciences, 2016
Merger refers to the prearrangement or procedure where the assets of two firms become vested under the control of one firm (whose name may or may not be exist), which has all or considerably all, the owners of the two firms [1]. Gaughan [2] argued that merger is a mixture of two firms or companies in which only one firm survive and the merged firm comes to an end, whereby the acquiring firm accepts the liabilities and assets of the merged firm. Design of Research and Methodology Data sample and study period The present research consists of the merger and acquisition of commercial banks. The merger and acquisition cases selection has been made on the basis of data uniformity and availability. These cases are shown in Table 1. The mergers of the sample banks have taken place on various dates during post reform period. In order to make performance comparison of selected merged banks, four years data before the merger