MERGERS AND ACQUISITIONS IN THE NIGERIAN BANKING INDUSTRY: AN ANALYSIS OF SELECTED PERFORMANCE MEASURES

Abstract

Business combination through mergers and acquisitions has become a global phenomenon to achieve economies of scale and higher productivity. This study evaluated the impact of mergers and acquisitions which started in 2005 on the performance of deposit money banks in Nigeria using a sample of ten (10) banks. This research made use of secondary data, obtained from the bank’s annual reports and statements of accounts covering a period of 1999-2018. Using four (4) variables; earning per share (EPS), net profit margin (NPM), assets utilization (AUT), and leverage (LEV), the study evaluated the performance of the banks before and after mergers and acquisitions using pair sample t-test. The results showed that there is significant difference in the performances of Deposit Money Banks in the pre and post-merger periods using the EPS and NPM yardstick but shows no significant impacts in the performances of Deposit Money Bank using AUT and LEV as yardstick. The study hereby recommends that the CBN should set and enforce better corporate governance standards for commercial banks and also enforce risk based supervision in banks.