Mergers and acquisitions: analysis of banking sector of Pakistan

Abstract

The present study initiated to find out the effect of M&A’s on the financial performance of banks. The study was conducted on the banking sector of Pakistan. Five (5) events were taken as a sample of the study. The data of every sample event was collected 3 years before and 3 years after the year of M&A’s. The study was based on CRAMEL model. As per the results, capital adequacy, resource allocation, management capabilities and liquidity have insignificant effects on bank’s performance after M&A’s while assets quality and earning quality has significant effects on the bank performance after M&A’s. According to paired sample t-test, capital adequacy, management capabilities, earning quality and liquidity does not show significant difference after M&A’s while assets quality showed significant difference after M&A’s.