MERGER AND ACQUISITION IN NIGERIA BANKING INDUSTRY EMPIRICAL STUDY OF THE FIRM PERFORMANCE

ABSTRACT

In order to strengthen the competitive and operational capabilities of banks in Nigeria with a view towards returning global and public confidence to the Nigerian banking sector and the economy in general, the Central Bank of Nigeria instituted a banking reform in 2004, which saw most of the then existing 89 banks merging with each other. This paper evaluates the impact of mergers and acquisitions on performance of Banks in Nigeria. To do this, pre-merger and post-merger financial statements of consolidated banks were obtained, adjusted, carefully analyzed and compared.

      Mergers and acquisitions in the Nigerian banking sector are reform strategies recently adopted to reposition the banking sector. These were done to achieve improved financial efficiency, forestall operational hardships and expansion bottlenecks. The impact of consolidation on bank structure has been obvious, while its impact on bank performance has been harder to discern. The government policy-promoted bank consolidation rather than market mechanism has been the process adopted by most developing or emerging economies and the time lag of the bank consolidation varies from nation to nation. 

     Following the outcome of the Special Joint Examination by the Central Bank of Nigeria (CBN) and Nigeria Deposit Insurance Corporation (NDIC), ten banks were indicted, out of which two were asked to recapitalize, while the Chief Executive Officers (CEOs) and Directors of the remaining eight were removed by CBN based on mismanagement and poor corporate governance. 

TABLE OF CONTENTS      PAGE Title PageiCertificationiiDedicationiiiAcknowledgement ivTable of ContentsvList of Table viiAbstract viiiCHAPTER ONE: INTRODUCTIONBackground of the Study1Statement of Problem 6Objectives of the Study7Research Question8Research Hypothesis9Scope and Limitation of the Study9Significance of the Study10Definition of the Terms10CHAPTER TWO: LITERATURE REVIEW2.1 Introduction122.2 Concept of Performance Evaluation172.3 Approaches to Performance Evaluation202.4 Quantitative Evaluation of Merger and Acquisition222.5 strength and weakness23 CHAPTER THREE: RESEARCH METHODOLOGY3.1 Introduction283.2 Research Design283.3 Population of the Study283.4 Sampling Size and Sampling Technique293.5 Data Collection Instrument293.6 Questionnaire Design303.7 Data Presentation and Analysis of Data30CHAPTER FOUR: PRESENTATION AND ANALYSIS OF DATA4.1 Introduction324.2 Profitability ratio for FBN Merchant bank324.3 Profitability ratios for MBC International bank354.4 Profitability ratio for First Bank Nigeria plc374.5 Analysis and discussion of findings40CHAPTER FIVE: SUMMARY, CONCLUSIONS AND RECOMMENDATION5.1 Introduction475.2 Summary of Findings475.3 Discussion of Findings485.4 Conclusion485.5 Recommendation495.6 Suggestion for further studies51            Bibliography52           Questionnaire58