THE EFFECT OF MERGER AND ACQUISITION ON FINANCIAL PERFORMANCE OF BANKS IN GHANA

Abstract

This thesis examined the impact of bank mergers and acquisitions in Ghana. It explored the effects of merger and acquisition of Ecobank and The Trust Bank. The study was guided by the following specific objectives: to determine whether a difference in financial performance exist between before and after merger and acquisition; to examine the reasons that motivated the need for merger and acquisition; to investigate the effects of the merger and acquisition on management, performance, salary and working hours of the organization; to discuss the challenges involved in the merger and acquisition process; to determine the effect of the mergers and acquisitions on the shareholders' value and to examine the implication of mergers and acquisitions on profitability. The study relied on secondary data collected from the Corporate Affairs Managers of the banks between 2000 and 2014 to analyze the financial performances before and after mergers. The study found out that merger and acquisition raised the shareholders' value of the merged and acquired bank. The study also indicates that the main reasons for merger and acquisition of banks were to raise profit and make banks more accessible to customers. Based on the field findings, the study recommends that Ecobank should continue to improve its operational efficiency to reap the benefits of the take-over of The Trust bank. Also, banks with requisite financial abilities should consider buying other smaller banks to be effective and increase their financial and marketing performance in the market.