ABSTRACT
Prior to the consolidation
exercise in 2005, the banking industry was filled with a large number of weak,
small banks that had low capital bases and were not performing their duties as
the main financial intermediaries in the economy. The consolidation exercise
which was spearheaded by the CBN governor, Charles Soludo raised the
recapitalization of deposit money banks to a minimum of N25 billion naira by
December 31, 2005 with mergers and acquisitions (M&As) as one of the
strategies the banks could adopt to meet this requirement. By the end of the
consolidation exercise, the number of banks had reduced from 89 to 25 while the
capital base and reliability of the banks that survived increased. This study
was carried out to find out the challenges faced by the banks during and after
the exercise, the performance of these banks in the post- consolidation period
and if mergers and acquisitions has in anyway affected the banks and if so, in
what ways. The Pearson product moment correlation technique and T-test was used
in the analysis and we found that mergers and Acquisitions affect banks
performance positively. The study examined the perceived impact of merger and
acquisition on the performance of banks in Nigeria using the selected banks,
the researcher adopted a five year audited financial reports of united bank for
Africa (UBA) plc. And standard trust bank (STB) was used for comparing the
performance of merged banks, while diamond bank plc. And lion bank was used for
acquisition using a five year period for both pre-acquisition and post acquisition
period. After the statistical analysis, the researcher concluded that the
result of post-merger and post-acquisition were greater than those of
pre-merger and post-acquisition. The findings of the research are that merger
and acquisition have enhances the profitability, shareholders' fund as well as
return on capital employed of consolidated banks in Nigeria. Thus, the
researcher concluded that merger and acquisition should be adopted as strategic
tools for performance improvement in Nigeria banking sector. The study examined
the challenges as well as benefits of merger and acquisition and further
suggests that in order to guard against possible abuse of the concept of merger
and acquisition, the central bank and other regulatory authorities should
checkmate the merger and acquisitions of banks in Nigeria and should provide
enabling environment that will encourage more mergers and acquisitions in
Nigeria which will in turn help build a strong capital base of banks in Nigeria
as well as encourage both local and foreign investors.
ONYENAGUBOM, C (2021). Impact Of Merger And Acquisition On The Performance Of Banks In Nigeria (A Study Of UBA Plc And Diamond Bank Plc). Mouau.afribary.org: Retrieved Nov 02, 2024, from https://repository.mouau.edu.ng/work/view/impact-of-merger-and-acquisition-on-the-performance-of-banks-in-nigeria-a-study-of-uba-plc-and-diamond-bank-plc-7-2
CHRISTIAN, ONYENAGUBOM. "Impact Of Merger And Acquisition On The Performance Of Banks In Nigeria (A Study Of UBA Plc And Diamond Bank Plc)" Mouau.afribary.org. Mouau.afribary.org, 26 Jul. 2021, https://repository.mouau.edu.ng/work/view/impact-of-merger-and-acquisition-on-the-performance-of-banks-in-nigeria-a-study-of-uba-plc-and-diamond-bank-plc-7-2. Accessed 02 Nov. 2024.
CHRISTIAN, ONYENAGUBOM. "Impact Of Merger And Acquisition On The Performance Of Banks In Nigeria (A Study Of UBA Plc And Diamond Bank Plc)". Mouau.afribary.org, Mouau.afribary.org, 26 Jul. 2021. Web. 02 Nov. 2024. < https://repository.mouau.edu.ng/work/view/impact-of-merger-and-acquisition-on-the-performance-of-banks-in-nigeria-a-study-of-uba-plc-and-diamond-bank-plc-7-2 >.
CHRISTIAN, ONYENAGUBOM. "Impact Of Merger And Acquisition On The Performance Of Banks In Nigeria (A Study Of UBA Plc And Diamond Bank Plc)" Mouau.afribary.org (2021). Accessed 02 Nov. 2024. https://repository.mouau.edu.ng/work/view/impact-of-merger-and-acquisition-on-the-performance-of-banks-in-nigeria-a-study-of-uba-plc-and-diamond-bank-plc-7-2