times merger
IRJC
International Journal of Marketing, Financial Services & Management Research
Vol.1 Issue 9, September 2012, ISSN 2277 3622
MERGERS IN INDIAN BANKS: A STUDY ON MERGERS OF HDFC
BANK LTD AND CENTURION BANK OF PUNJAB LTD.
DEVARAJAPPA S.*
*Assistant Professor in Commerce,
University College of Arts,
Tumkur University.
ABSTRACT
The purpose of the present paper is to explore various motives of merger in Indian banking industry. This includes various aspects of bank mergers. It also compares pre and post merger financial performance of merged banks with the helps of financial parameters like, Gross Profit margin, Net Profit margin, operating Profit margin, Return on Capital Employed, Return on
Equity, and Debt Equity Ratio. Through literature Review it comes know that most of the work done high lightened the impact of merger and Acquisition on different companies. The data of
Merger and Accusations since economic liberalization are collected for a set of various financial parameters. Independent T-test used for testing the statistical significance and this test is applied not only for ratio analysis but also effect of merger on the performance of banks. This performance being tested on the basis of two grounds i.e. , Pre-merger and Post- merger. Finally the study indicates that the banks have been positively affected by the event of merger.
KEYWORDS: Mergers & Acquisition, Banking, Financial Parameters, Profitability, Indian
Banks.
______________________________________________________________________________
Merger of two weaker banks or merger of one health Bank with one weak bank can be treated as the faster and less costly way to improve profitability then spurring internal growth (Franz, H.
Khan 2007).The main motive behind the merger and acquisition in the banking industry is to achieve economies of scale and scope. Mergers also help in the diversification of the products, which help to reduce the risk.
33
Bank in general
International Journal of Marketing, Financial Services & Management Research
Vol.1 Issue 9, September 2012, ISSN 2277 3622
MERGERS IN INDIAN BANKS: A STUDY ON MERGERS OF HDFC
BANK LTD AND CENTURION BANK OF PUNJAB LTD.
DEVARAJAPPA S.*
*Assistant Professor in Commerce,
University College of Arts,
Tumkur University.
ABSTRACT
The purpose of the present paper is to explore various motives of merger in Indian banking industry. This includes various aspects of bank mergers. It also compares pre and post merger financial performance of merged banks with the helps of financial parameters like, Gross Profit margin, Net Profit margin, operating Profit margin, Return on Capital Employed, Return on
Equity, and Debt Equity Ratio. Through literature Review it comes know that most of the work done high lightened the impact of merger and Acquisition on different companies. The data of
Merger and Accusations since economic liberalization are collected for a set of various financial parameters. Independent T-test used for testing the statistical significance and this test is applied not only for ratio analysis but also effect of merger on the performance of banks. This performance being tested on the basis of two grounds i.e. , Pre-merger and Post- merger. Finally the study indicates that the banks have been positively affected by the event of merger.
KEYWORDS: Mergers & Acquisition, Banking, Financial Parameters, Profitability, Indian
Banks.
______________________________________________________________________________
Merger of two weaker banks or merger of one health Bank with one weak bank can be treated as the faster and less costly way to improve profitability then spurring internal growth (Franz, H.
Khan 2007).The main motive behind the merger and acquisition in the banking industry is to achieve economies of scale and scope. Mergers also help in the diversification of the products, which help to reduce the risk.
33
Bank in general