Effect Of Mergers And Acquisition On Banks Profitability In Nigeria (1991-2017)

ABSTRACT

The study examined the effect of mergers and acquisitions on banks’ profitability in Nigeria using time series data from 1991 to 2017. The data used for the study was sourced from Central Bank of Nigeria statistical bulletin and Nigeria Deposit Insurance Corporation annual report. Mergers and acquisition was captured by dummy variables and total assets of banks, while banks’ capital and profitability was measured using capital base and return on assets respectively. For the analysis, regression analysis technique was used. From the results of the data analysis, it was found that mergers and acquisition had no significant effect on banks capital, while the effect of banks’ total assets on capital base was significant. Also, mergers and acquisition had an insignificant effect on return on assets while the effect of total banks assets on return on assets was significant. Based on these findings, it was recommended among other things that individual banks experiencing distress should go into recapitalization and consolidation using mergers and acquisitions to enable them attain consistent growth in their total assets, profits, deposits and capital base.

TABLE OF CONTENTS

Tittle Page ﾿ i

Declaration ﾿ ii

Certification ﾿ iii

Dedication ﾿ iv

Acknowledgements ﾿ v

Table of Content ﾿ vi

List of Tables ﾿ ix ﾿

Abstract ﾿ x ﾿

CHAPTER ONE: INTRODUCTION

1.1 Background to the study ﾿ 3

1.2 Statement of problem      ﾿ 4

1.3 Objectives of the study      ﾿ 4

1.4 Research questions        ﾿ 5

1.5 Research hypothesis      ﾿ 5

1.6 Scope of the study.        ﾿ 5

1.7 Significance of the Study. ﾿ 6  

﾿   ﾿

CHAPTER TWO: LITERATURE REVIEW

2.1 Conceptual framework of mergers and acquisition.    ﾿ 7

2.1.1Concept of mergers and acquisition.              ﾿ 9

2.1.2 Reasons for mergers and acquisition.            ﾿                                                  10

2.1.3 motives for mergers and acquisition.            ﾿ 14

2.2 Theoretical Review                            ﾿ 14

2.2.1 Theory of synergy                          ﾿ 15

2.2.2 The Value of increasing Theory.                ﾿ 15

2.2.3 Concentration Theory.                      ﾿ 16

2.2.4 Mergers an Acquisition in Nigeria.            ﾿ 17

2.2.5 Bank performance measures                  ﾿ 18

2.3 Empirical Review                            ﾿ 23

CHAPTER THREE: RESEARCH METHODOLOGY

3.1 Research design                            ﾿ 24

3.2 Nature and Source of Data                  ﾿ 24

3.3 Method of Data Analysis                      ﾿ 24

3.4 Model Specification                        ﾿ 25

3.5 Description of Research Variables            ﾿ 26

3.5.1 Dependent Variable.                      ﾿ 26

3.5.2 Independent Variables                      ﾿ 26

3.6 Techniques of Data Analysis                ﾿ 27

CHAPTER FOUR: PRESENTATION OF DATA, ANALYSIS AND DISCUSION

4.1 Presentation of Data                      ﾿ 28

4.2 Data Analysis and Discussion of Finding      ﾿ 29

4.2.1 Descriptive Analysis                    ﾿ 29

4.2.2 Regression Analysis                    ﾿ 32

4.2.3 Hypotheses Testing                    ﾿ 33

CHAPTERFIVE                                                                

SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATION 

5.1 Summary of findings                    ﾿ 34

5.2 Conclusion                              ﾿ 34

5.3 Recommendation                        ﾿ 35

Reference

Appendix                                ﾿