Post-Merger Performance of Selected Nigerian Deposit Money Banks-An Econometric Perspective

Abstract

The paper examined post merger performance of Nigerian banking sector with the aim of determining the effect and the extent to which merger influenced bank performance. A judgmental sample technique was used to select 15 listed commercial banks in Nigeria. Data were collected from the published annual reports and account of these banks and were analyzed using percentage and ratios. Multiple regressions were used in testing the hypotheses. The study revealed that there is a strong relationship between bank performance and merger (strategic decisions) – asset profile, capital structure, operating efficiency, liquidity risk and credit risk. That strategic decision has positively influenced bank performance. That on average, bank consolidation resulted into improved performance. The study therefore recommended that the management of the banks should embrace diversification and financial innovation on product strategies as this will help in generating more income for the banks. They should also try to use merger as a strategic tool which must be continuously applied and implemented.