Effect OfMerger And Acquisition On Financial Performance Of Selected Banks In Nigeria: A Study Of Two Selected Banks In Nigeria:- Nwafor Victor C

Abstract

It is important to understand that Mergers and acquisitions is a form of corporate restructuring strategies recently adopted to reposition the banking sector. This study seeks to examine the effect of merger and acquisition on the financial performance ofselected commercial banks in Nigeria as the main objective. The study used shareholders fund as proxy for merger and acquisition and net profit margin, return on equity and earnings per share of the selected banks as proxies to measure the financial performance ofthe banksin Nigeria. Two banks were selected forthis study using simple random sampling methods. Data were collected from Academic journals, Nigerian stock exchange archive, text books, magazines, and were subsequently analyzed using correlation and regression with the aid ofEconometrics view (version 10). This study found out that “mergers and acquisition” is an instrument for banking sector reform, because the study found out that shareholders fund contributed significantly to the changes in net profit margin, earning per share and return on equity ofthe banks, and that corporate restructuring has affected the capital adequacy of commercial banks positively, It was also discovered that synergy gains are the key motive for bank mergers. The study recommended that the consolidated banks in Nigeria should hasten the expansion of their branch both in the rural and urban areas in order to bring banking service delivery nearerto their customers, Government and the regulatory authoritiesin thebanking sector should impose laws which must be complied with by Nigerian banks in order for the banks to be conscious on theirtoes by enforcing checks and balances in their various operating departments in the system