Effectiveness of Pakistani Banks after Merger and AcquisitionMuhammad Rizwan Ullah1*, Muhammad Azam2, Muhammad Awais1 and Mamoona Majeed3
- *Corresponding Author:
- Muhammad Rizwan Ullah
Department of Banking and Finance
Government College University Faisalabad, Pakistan
Tel: +92 41 9200886
E-mail: [email protected]
Received date: August 27, 2015 Accepted date: November 12, 2015 Published date: November 16, 2015
Citation: Ullah MR, Azam M, Awais M, Majeed M (2015) Effectiveness of Pakistani Banks after Merger and Acquisition. Int J Econ Manag Sci 5:311. doi:10.4172/2162-6359.1000311
Copyright: © 2015 Ullah MR, et al. This is an open-access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.
The aim of merger of banks is to increase the value of banks in one way or another. The days of globalization and liberalization are in and there is a rash of merger and acquisition which is sweeping the corporate world. Consolidation in banking industry should essentially be synergy-driven to obtain a quantum leap in the effectiveness of the merged entity. It can be attained by merging complementary strength, serving a greater number of customers in a good way with more differentiated skills and products, giving a well geographical spread, comprising the cost of combined entity, better utilization of available resources, recognizing the opportunities for cross selling, deriving economies of scale and reduced competition. Over the last span, the banking industry in Pakistan has not only grown-up in terms of size but also consolidated, matured and diversified to contribute towards constructing a strong financial system. In this study, five bank merger’s cases have been taken and Null Hypothesis (there is no difference in the mean value of selected variables before and after the merger) is found rejected. Based on overall analysis, merger of My Bank Limited with Summit Bank Limited was more effective in most of the variables as compared to the merger of PICIC Commercial Bank Limited with National Investment Bank Limited, Union Bank Limited with Standard Chartered Bank Limited, JS investment Bank Limited with JS Bank Limited and Askari Leasing Limited with Askari Bank Limited.