ASSESSING THE TAKEOVER OF INTERCONTINENTAL BANK GHANA LIMITED BY ACCESS BANK GHANA LIMITED (ABG) AND ITS IMPACT ON THE FINANCIAL PERFORMANCE OF ABG
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Date
August, 2015
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Abstract
The increased globalization has seen businesses enter new markets in order to expand their
customer base and compete better within the ever increasing competitive environment.
Mergers and acquisitions (Takeovers) has become one major strategy of growth used by
these businesses to survive these competitions and ensure growth. This study assessed the
takeover of Intercontinental bank Ghana Limited (IBG) by Access Bank Ghana Limited
(ABG) as a growth strategy. The research was undertaken as a case study where
quantitative research analysis was employed to determine the impact of the takeover on
the financial performance of ABG (the predator bank) while assessing the existence of
synergy in the takeover process. The final objective was to identify the challenges faced
by ABG after acquiring IBG and assess the various strategies employed by management to
overcome the challenges. Secondary data (Published financial reports of ABG and IBG)
was used for measuring financial performance and synergy. Here, financial ratios were
calculated for financial performance measurement while in measuring synergy, t statistics
analysis was used to determine the significance difference between the mean of ABG after
the merger, and ABG & IBG together where there is no merger. A researcher administered
interview was also used to gather primary data for assessing the challenges encountered
during the takeover and strategies adopted by management to overcome the challenges.
The study found that, the takeover had a positive impact on the financial performance of
ABG as majority of the financial ratios calculated gave a positive impact. In terms of
synergy, there was a positive evidence of synergy in the takeover processed. This was
confirmed with the t statistics results where it was found that the mean of the financial
figures for ABG was significantly higher for when there is a merger than when there is no
merger. The study recommended that the bank liberalizes its banking philosophies to take
advantage of the large retail banking opportunity of IBG.
Description
A Thesis submitted to the Department of Accounting and Finance, Kwame Nkrumah University of Science and Technology in partial fulfilment of the requirements for the degree of Master of Business Administration (Finance Option)