Comparative analysis of pre- and post- mergers and acquisitions results of Nigerian banks

Abstract

The banking reform that commenced on the 1st of January, 2006 had been a major wave towards a diversified, strong and reliable banking sector in Nigeria. This paper examined the mega banks by evaluating their results three before and three years after the consolidation exercise in Nigeria (2003-2009). This study further examined the impact of consolidation on performance and considers if there had been considerable improvement on their capital base, bank revenue, total assets, and cost of operation. We analyzed six ratios of a sample of fifteen (15) mega banks. Descriptive analysis of these performance ratios was carried out. We found that, on average, merger and acquisition have not improved the results of merged banks in post consolidation era.

Keywords: Mergers, acquisition, shareholders wealth, capital base, market share, bank revenue