The effect of mergers and acquisition on banks financial performance in the ghanaian banking industry (a case study of fidelity bank and procredit savings and loans)
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Date
2023
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KNUST
Abstract
The study intended to determine if merger and acquisition have a detrimental or positive influence on the performance of Fidelity Bank over a defined time by assessing the bank’s financial metrics. Trend, correlation, and regression analysis were used to determine the extent to which the selected bank’s performance was influenced before and after acquisition. In the trend study, Fidelity Bank Ghana Limited had a steady increase in revenue and assets before acquisition. The analysis also discovered that the bank's revenue increased significantly at the time of purchase, but witnessed a little decline in percentage between 2014 and 2015 after acquisition. Net profit margin and mergers & acquisitions have a negative association. According to the research, there is a negative association between net profit margin and age and size. The findings demonstrated a negative link between mergers and acquisitions and return on assets. The conclusion is statistically insignificant, with a weak connection between the two variables, suggesting that mergers and acquisitions result in a minimal decline in return on assets. Bank size and age also had a negative association with return on assets, which was statistically significant. The results show a statistically insignificant positive relationship between mergers and acquisitions and return on equity. Bank size and age also had a negative association with return on assets, which was statistically significant. It is advised that banks do not just focus on boosting volumes at any costs. They must also keep an eye on the resources employed to attain these goals. According to the conclusions of this investigation, banks should embrace mergers and acquisitions as a business development strategy. Corporations could also employ other measures, such as retrenchment and reorganization, to cut acquisition costs.
Description
A thesis submitted to the department of accounting and finance, school of business, Kwame Nkrumah university of science and technology in partial fulfilment of the requirement for the award of the degree of master of business administration (finance)