Effect of Merger and Aquisition

Global Business and Economics Research Journal ISSN: 2302-4593 Vol. 2 (7): 12 - 27

Financial efficiency of banks in the pre and post mergers and acquisitions era of banks in Nigeria: a comparative analysis

Adesegun Owolabi

The Federal Polytechnic, Ado-Ekiti, Nigeria owolabiseg@yahoo.com

Nelson O. Ajayi

The Federal Polytechnic, Ado-Ekiti, Nigeria

Abstract Mergers and acquisitions in the Nigerian banking sector are reform strategies recently adopted to reposition the banking sector. These were done to achieve improved financial efficiency, forestall operational hardship and expansion bottlenecks. It is against this backdrop that this paper made a comparative analysis on the financial efficiency of banks in the pre and post merger and acquisitions era in Nigeria. This paper used gross earnings, profit after tax and net asset of the selected bank as indices to determine financial efficiency by comparing the pre-mergers and acquisitions indices for the period under review for this paper, three Nigeria banks were selected using convenience and judgment sample selection methods. Data were collected from the published annual reports and account of the selected banks and were subsequently analysed applying t-test statistics through statistical package for social science. It was found that the post-mergers and acquisitions period was more financially efficient, the study recommend that the banks should be more aggressive in their profit drive for improved financial position to reap the benefits of post mergers and acquisitions. Keywords: financial efficiency, banks, pre-merger, post-merger, acquisitions

Citation: Owolabi, A. and Ajayi, N. O. (2013). Financial efficiency of banks in the pre and post mergers and acquisitions era of banks in Nigeria: a comparative analysis. Global Business and Economics Research Journal, 2(7): 12-27.

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