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Chapter-I: Abstract

This study examines the impact of mergers on the operating performance of banks using the merger between NIC Bank and Bank of Asia in Nepal as a sample case. 8 operational ratios are analyzed using statistical tests on quarterly data to determine if the merger led to improved profitability. The analysis found that almost all operational ratios improved following the merger, indicating it played a significant role in enhancing performance. The merger is also concluded to be a wise option for addressing current problems in Nepalese banking and meeting capital requirements, though it is not a complete solution on its own and other factors must be considered to ensure a successful merger.

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Pratikshya Karki
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37 views1 page

Chapter-I: Abstract

This study examines the impact of mergers on the operating performance of banks using the merger between NIC Bank and Bank of Asia in Nepal as a sample case. 8 operational ratios are analyzed using statistical tests on quarterly data to determine if the merger led to improved profitability. The analysis found that almost all operational ratios improved following the merger, indicating it played a significant role in enhancing performance. The merger is also concluded to be a wise option for addressing current problems in Nepalese banking and meeting capital requirements, though it is not a complete solution on its own and other factors must be considered to ensure a successful merger.

Uploaded by

Pratikshya Karki
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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CHAPTER-I

ABSTRACT:
This study aims to find the impact of mergers on operating performance of
sample merged banks. To attain the research objective, this study has taken 8
independent variables; operating profit margin, net profit margin, return on
assets, return on equity, debt equity ratio, return on loan loss provision, return
on staff expenses and return on operating expenses. Case of one of the first merger in Nepalese
banking industry ie; between NIC Bank and Bank of Asia have been taken for the study as a
sample to examine whether merger has led to a profitable situation or not. Research mainly
focuses on quarterly secondary data which is analyzed using paired sample t-test, correlation
analysis, VIF test and regression analysis. From the analysis it is establish that merger plays a
significant role where almost all operational
ratios have improved in post-merger. Further the merger will somewhat act as a solution for the
current problems of Nepalese BFIs. Merger will be a wise option to
bring BFIs in strong and growing position and to meet the requirement of
current paid up capital as per the latest NRB directive. But it also must be
considered that merger in itself is not the ultimate solution to strengthen the
financial position of BFIs. A lot of factors must be taken into account before
finding the right partner to merge with and executing the merger.

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