IMPACT OF MERGER AND ACQUISITION ON THE PERFOMANCE OF DEPOSIT MONEY BANKS IN NIGERIA

Osifalujo, Babatunde Bunmi and Olufemi, O Omotilewa

Department of Accountancy

Moshood Abiola Polytechnic, Abeokuta Ogun State

Email: osifalujobabatunde@gmail.com

ABSTRACT

 Low capital base, insolvency, and business distress among other factors have contributed to recent failure of banks in Nigeria. Banks all over the world now adopt mergers and acquisitions as a strategy to improve their performance. This study examined the impact of mergers and acquisition on the performance deposit money bank in Nigeria. The research used capital structure, asset profile, total deposit and profit after tax of the selected bank to measure the performance and effect of merger and acquisition of the bank in both pre and post merger and acquisition period. Data were collected from the published financial statements of the bank namely former Intercontinental Bank Plc and Access Bank (now Access Bank Plc) from 2005 to 2017 and the model was formulated using ordinary least square method. It was revealed that For both the pre-merger and post-merger periods, it was revealed that the access bank performed better. In the post – merger and acquisition period as asset profile and total deposit has no significant effect on the profit after tax of access bank in Nigeria, while capital structure has a significant effect on profit after tax of access bank plc.  While in the pre-merger and acquisition capital structure, asset profile and total deposit have no significant impact on profit after tax of access bank plc. The study concludes that mergers and acquisitions have a significant impact on the performance of deposit money bank in Nigeria. Therefore, the study recommended that banks can merge or acquire each other , as this has proved to become a strategy for rescuing ailing or weak ones and could provides a platform that would enhance financial performance

Keywords: Merger, Acquisition, Financial Performance, Deposit Money Banks.