Merger and Its Impact on Financial Performance of Commercial Banks in Nepal
Date
2021
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Department of Management
Abstract
The study entitled merger and its impact on financial performance of commercial
banks in Nepal. The purpose of this research is to study the effect of merger on the
financial performance of commercial bank when Nepal Rasta Bank introduced a
forceful merger bylaws policy in the year of 2011. Three year pre-merge and postmerger
financial
performance
is analysis
of
three
commercial
banks
which
are
merged
in
2016 AD. This study is based on the descriptive and analytical research design.
Performance of commercial banks is measured by different variables such as ROA,
ROE, EPS, profit margin, capital adequacy, assets quality, liquidity and debt to equity
ratios. Pared sample t-test is used to measure the significant change pre-merger
performance and post-merger performance. This study conclude that Returns on
Assets, earning per share, profit margin, liquidity increased significantly after the
merger of the banks. However return on equity, assets quality, debt to total equity and
capital adequacy ratio are decreased after the merger. The assets quality ratios, which
is measured by the total nonperforming assets to total loan and advance is decreased
after the merger, which show that the performing assets of merged banks. The merged
banks able to maintain nonperforming assets ratios as refers by Nepal Rastra Bank.
Similarly the sampled merged bank able to meet the capital adequacy ratio.
Description
Keywords
Financial performance, Commercial banks, Aapital adequacy, Merger