This research examines the impact of post-merger performance on Nigerian banks using data from Access Bank and United Bank for Africa between 2005-2012. The study finds that post-merger performance has not significantly impacted banks' profitability. It recommends that only strong banks merge to form mega-banks to achieve promised synergies, and that unethical banking practices be discouraged. The document provides background on reasons for increasing mergers and acquisitions in Nigeria's banking sector, as well as challenges that can arise from the consolidation process.
The profitability of commercial banks is influenced by a number of internal and external factors. This paper attempts to identify the internal factors which significantly influence the profitability of commercial banks in Bangladesh. In this study, profitability is measured by ROA and ROE which may be significantly influenced by the internal factors such as IRS, NIM, CAR, CR, DG, LD, CTI and SIZE of the bank. Data are collected from published annual reports during 2014--2018 of 23 commercial banks. Using simple regression model, it is found that CR has significant effect on the profitability and CAR has significant influence on ROA only. In addition to this, DG has significant effects on PCBs’ profitability (ROE only) where as IRS and CTI have significant influence on profitability (ROA only) of ICBs. Further, none of these variables have significant effects on the profitability of SCBs but CAR and CR are correlated with profitability (ROA only) and the causes may be the nature of services provided by SCBs to its clients. The internal policy makers should manage the influential internal factors of the banks in order to increase their profitability so that they can meet stakeholders’ expectations.
Credit Risk and Financial Performance of Commercial Banks in Kenyarobert siriba
This document discusses a study on the relationship between credit risk and financial performance of commercial banks in Kenya from 2014-2018. It provides background on credit risk and how it can be measured using non-performing loans, loan loss provisions, and loans and advances. The study found that non-performing loans and loan loss provision had non-significant negative effects on bank profitability, while loans and advances had a significant positive impact. The document reviews relevant literature and theories around credit risk and financial performance.
A nexus between liquidity & profitability a study of trading companies in sri...Alexander Decker
This document summarizes a study that investigated the relationship between liquidity and profitability of trading companies in Sri Lanka. The study analyzed annual report data from 8 listed trading companies over a 5-year period from 2008 to 2012. Correlation and regression analyses were used to examine the nature and extent of the relationship between liquidity ratios like current ratio and quick ratio and profitability ratios like return on equity and return on assets. The findings suggest there is a significant relationship between liquidity and profitability among the sampled trading companies in Sri Lanka. However, the results may not be generalizable to non-public companies or other sectors. The document provides background on liquidity, profitability, prior studies on the relationship, and the methodology used
Assessing the effect of liquidity on profitability of commercial banks in kenyaAlexander Decker
This document discusses factors that affect the profitability of commercial banks in Kenya. It provides background on the banking sector in Kenya and reviews various theories on factors that influence bank profitability, including market power theory, efficiency structure theory, and the Modigliani-Miller theorem. The study aimed to determine the effect of internal factors like liquidity on the profitability of commercial banks in Kenya. It found that liquidity has a statistically significant and positive relationship with bank profitability.
This study examined the effect of interest rate deregulation on Nigerian banking system. The study adopted Augmented Dickey – Fuller (ADF), Bound test and Autoregressive Distributed Lag (ARDL). The correlation result indicated that of the correlation matrix that all the explanatory variables (interest rate, lending rate and deposit rate) had effect on loan and advances. The results of the unit root test revealed that interest rate and lending rate were stationary at level 1(0) while loan and advances and deposit rate were stationary at first difference 1(1). Also the results of the bound test revealed that there exist long run equilibrium relationship among the variables. The result of the ARDL indicated that interest rate had significant effect on loan and advances while lending rate and deposit rate had an insignificant effect on loan and advances. It was concluded that banks should monitor the level of loan and advances in respect to major ratios for effective performance. The study thus, recommended that banks should monitor lending rate which should be fixed in order to enhance lending performance. Regulatory authority should ensure that macroeconomic variables such as money supply, liquidity ratio, lending rate, monetary policy rate are effectively managed to enhance bank performance.
Determinants of commercial banks lending evidence from ethiopian commercial b...Alexander Decker
This document summarizes a study that examined the determinants of commercial bank lending in Ethiopia between 2005-2011. The study tested whether bank size, credit risk, GDP, investment, deposit, interest rate, liquidity ratio, and cash reserve requirements influenced bank lending. It found that bank size, credit risk, GDP, and liquidity ratio had a significant relationship with lending, but deposit, investment, interest rate, and cash reserves did not. The study suggests banks focus on managing credit risk and liquidity to support lending.
Relevance of Mergers and Acquisition on Financial Performance of Deposit Mone...iosrjce
The paper examined the effects of Merger and Acquisition on the financial performance of selected
deposit money banks in Nigeria with emphasis on Profit After Tax, Gross Earnings and Asset Growth as
financial efficiency parameters. Two Nigeria Deposit Money Bank were selected using convenience and
judgemental sample selection methods. Data were collected from the published financial statements of the banks
namely former Oceanic bank and Ecobank Plc (now Ecobank Plc) and former Intercontinental Bank Plc and
Access Bank (Access Bank Plc). Data were analyzed using Linear Regression statistical tool. The results
revealed that Post Merger Financial Performance was significantly improved than the Pre Merger period of the
banks. The study therefore recommends that banks can merge or acquire each other as this has proved to
become a plat form for rescuing ailing ones and could provides a platform that could enhance batter financial
performance
This document summarizes a study that empirically investigated the relationship between liquidity and profitability in Nigerian commercial banks. The study used secondary data from 10 years of annual reports of First Bank Nigeria PLC, the oldest and largest bank. Regression analysis found a very high correlation between liquidity and profitability, showing that liquidity is a determining factor in bank profitability. It was recommended that monetary authorities boost bank liquidity to increase loanable funds and profit, and that banks improve liquidity management to prevent insolvency.
The profitability of commercial banks is influenced by a number of internal and external factors. This paper attempts to identify the internal factors which significantly influence the profitability of commercial banks in Bangladesh. In this study, profitability is measured by ROA and ROE which may be significantly influenced by the internal factors such as IRS, NIM, CAR, CR, DG, LD, CTI and SIZE of the bank. Data are collected from published annual reports during 2014--2018 of 23 commercial banks. Using simple regression model, it is found that CR has significant effect on the profitability and CAR has significant influence on ROA only. In addition to this, DG has significant effects on PCBs’ profitability (ROE only) where as IRS and CTI have significant influence on profitability (ROA only) of ICBs. Further, none of these variables have significant effects on the profitability of SCBs but CAR and CR are correlated with profitability (ROA only) and the causes may be the nature of services provided by SCBs to its clients. The internal policy makers should manage the influential internal factors of the banks in order to increase their profitability so that they can meet stakeholders’ expectations.
Credit Risk and Financial Performance of Commercial Banks in Kenyarobert siriba
This document discusses a study on the relationship between credit risk and financial performance of commercial banks in Kenya from 2014-2018. It provides background on credit risk and how it can be measured using non-performing loans, loan loss provisions, and loans and advances. The study found that non-performing loans and loan loss provision had non-significant negative effects on bank profitability, while loans and advances had a significant positive impact. The document reviews relevant literature and theories around credit risk and financial performance.
A nexus between liquidity & profitability a study of trading companies in sri...Alexander Decker
This document summarizes a study that investigated the relationship between liquidity and profitability of trading companies in Sri Lanka. The study analyzed annual report data from 8 listed trading companies over a 5-year period from 2008 to 2012. Correlation and regression analyses were used to examine the nature and extent of the relationship between liquidity ratios like current ratio and quick ratio and profitability ratios like return on equity and return on assets. The findings suggest there is a significant relationship between liquidity and profitability among the sampled trading companies in Sri Lanka. However, the results may not be generalizable to non-public companies or other sectors. The document provides background on liquidity, profitability, prior studies on the relationship, and the methodology used
Assessing the effect of liquidity on profitability of commercial banks in kenyaAlexander Decker
This document discusses factors that affect the profitability of commercial banks in Kenya. It provides background on the banking sector in Kenya and reviews various theories on factors that influence bank profitability, including market power theory, efficiency structure theory, and the Modigliani-Miller theorem. The study aimed to determine the effect of internal factors like liquidity on the profitability of commercial banks in Kenya. It found that liquidity has a statistically significant and positive relationship with bank profitability.
This study examined the effect of interest rate deregulation on Nigerian banking system. The study adopted Augmented Dickey – Fuller (ADF), Bound test and Autoregressive Distributed Lag (ARDL). The correlation result indicated that of the correlation matrix that all the explanatory variables (interest rate, lending rate and deposit rate) had effect on loan and advances. The results of the unit root test revealed that interest rate and lending rate were stationary at level 1(0) while loan and advances and deposit rate were stationary at first difference 1(1). Also the results of the bound test revealed that there exist long run equilibrium relationship among the variables. The result of the ARDL indicated that interest rate had significant effect on loan and advances while lending rate and deposit rate had an insignificant effect on loan and advances. It was concluded that banks should monitor the level of loan and advances in respect to major ratios for effective performance. The study thus, recommended that banks should monitor lending rate which should be fixed in order to enhance lending performance. Regulatory authority should ensure that macroeconomic variables such as money supply, liquidity ratio, lending rate, monetary policy rate are effectively managed to enhance bank performance.
Determinants of commercial banks lending evidence from ethiopian commercial b...Alexander Decker
This document summarizes a study that examined the determinants of commercial bank lending in Ethiopia between 2005-2011. The study tested whether bank size, credit risk, GDP, investment, deposit, interest rate, liquidity ratio, and cash reserve requirements influenced bank lending. It found that bank size, credit risk, GDP, and liquidity ratio had a significant relationship with lending, but deposit, investment, interest rate, and cash reserves did not. The study suggests banks focus on managing credit risk and liquidity to support lending.
Relevance of Mergers and Acquisition on Financial Performance of Deposit Mone...iosrjce
The paper examined the effects of Merger and Acquisition on the financial performance of selected
deposit money banks in Nigeria with emphasis on Profit After Tax, Gross Earnings and Asset Growth as
financial efficiency parameters. Two Nigeria Deposit Money Bank were selected using convenience and
judgemental sample selection methods. Data were collected from the published financial statements of the banks
namely former Oceanic bank and Ecobank Plc (now Ecobank Plc) and former Intercontinental Bank Plc and
Access Bank (Access Bank Plc). Data were analyzed using Linear Regression statistical tool. The results
revealed that Post Merger Financial Performance was significantly improved than the Pre Merger period of the
banks. The study therefore recommends that banks can merge or acquire each other as this has proved to
become a plat form for rescuing ailing ones and could provides a platform that could enhance batter financial
performance
This document summarizes a study that empirically investigated the relationship between liquidity and profitability in Nigerian commercial banks. The study used secondary data from 10 years of annual reports of First Bank Nigeria PLC, the oldest and largest bank. Regression analysis found a very high correlation between liquidity and profitability, showing that liquidity is a determining factor in bank profitability. It was recommended that monetary authorities boost bank liquidity to increase loanable funds and profit, and that banks improve liquidity management to prevent insolvency.
A Comparison of Key Determinants on Profitability of India’s Largest Public a...Rajveer Rawlin
The banking sector in India has come under the scanner following some key changes in monetary policy. With
the Reserve bank of India (RBI) raising interest rates to support the falling Indian currency the Rupee, the cost of
funds of banks has increased significantly. This could manifest itself in rising non-performing assets (NPAs) and
declining profitability. The profitability of banks is impacted by both internal and external factors. This paper is
an attempt to compare the key drivers of profits at India’s largest public and private sector banks. Bank specific
metrics and risk factors were important drivers of profits at both banks. Productivity measures were key drivers
of profits at India’s largest public sector bank SBI but had no effect on profits at India’s largest private sector
bank, HDFC bank. Asset usage efficiency measures were key determinants of profitability at HDFC bank but not
at SBI. The single most important determinant of SBI proved to be business per employee, a productivity
measure while advances and bank size which are traditional bank metrics were key drivers of profits at HDFC
bank. Managers at both banks and their share holders thus can look at these drivers to develop a broad
understanding of profitability at the two banks.
The aims of the paper are to study the financial performance between the independent finance companies and the
integrated finance companies over the period 2001-2011.
An analysis of the impact of mergers and acquisitions on commercial banks per...Alexander Decker
This document analyzes the impact of mergers and acquisitions on commercial banks in Nigeria. It discusses how the Central Bank of Nigeria introduced reforms in 2004 that required banks to increase their minimum capital to 25 billion naira by 2005. This led to over 80% of banks merging into 25 banks, while 14 banks that did not meet the requirement were liquidated. The document examines whether these mergers improved bank performance in terms of profitability, capitalization, and earnings per share. It also discusses the theoretical background and history of bank recapitalization in Nigeria.
Financial reporting quality has been said to play an important role in reducing information asymmetry. Thus, firms with high financial reporting quality may enhance more investors’ decision. Hence, the basic objective of this study is to determine whether earnings quality influence investors’ decision. The sample consisted of 10 manufacturing companies listed on the Nigerian Stock Exchange Market. The study period is 5 years (2010-2014). Data on accrual quality, volume of investment, Size, age and growth rate and earnings per share were drawn from the published annual report and accounts of the sampled companies. Correlation matrix, Vector auto regressive estimation and Pooled OLS model were employed for the analysis. Diagnostic tests for post estimation were also performed on the model. The result of the Ramsey Reset test shows a p-value of 0.2105, implying that model has no omitted variables. Also, Wooldridge test for autocorrelation in panel data indicates no first-order autocorrelation, showing a p-value of 0.3642. We calculated accruals quality based on the modified accrual model proposed by Mac Nichols in 2002. In this paper, the absolute value of residual error represents the financial reporting quality. This threshold is based on the idea that accruals reduce the smoothing initiated by the change in the cash flow and thus increase the earnings awareness. The study finds evidence of a positive association between investors’ decision and financial reporting quality.
052 om c-dhanapal&gganesan-measuring_operational_efficiency_of (1) (1)Anil Aks
This document summarizes a study that measures the operational efficiency of public sector banks in India. It analyzes factors that influence banks' profitability using regression analysis. The study finds that non-performing assets, total income, total expenses, and net interest margin are significant factors. It also uses data envelopment analysis to benchmark the relative efficiency of 21 public sector banks over 5 years. The results show that return on assets, net interest margin, non-performing loans, cost-to-income ratio, advances to deposits ratio, and capital adequacy ratio influence banks' profitability.
Determinants of commercial banks profitability panel data evidence from pakistanAlexander Decker
This document summarizes a research study that investigated the determinants of commercial bank profitability in Pakistan from 2004-2010. The researchers used multiple regression analysis on a sample of 5 major commercial banks to determine the relationship between return on assets (the dependent variable) and various internal and external independent variables. The results indicated that internal factors like liquidity, efficiency, asset composition, deposit composition, and external factors like firm size had a significant impact on bank profitability. The study adds to the limited literature on factors influencing bank performance in Pakistan.
This document discusses a study on the effect of capital structure on the profitability of conventional and Islamic banks in Pakistan. The study examines the relationship between capital structure factors like total liabilities to total assets, total equity to total assets, total liabilities to total equities, and bank size with profitability measures like return on equity and return on assets. Annual reports from 5 Islamic banks and 5 conventional banks between 2010-2014 are analyzed using statistical tools like correlation analysis and t-tests. The study aims to compare the capital structure and its impact on profitability between conventional and Islamic banks in Pakistan and help policymakers. Limitations and the thesis structure are also outlined.
This study aims to find the efficiency of selected Kenyan sample commercial banks. As the
banking industry is the main sector that contributes significantly to the development of the
national economy and hence the efficiency of commercial banks gains significantly. The analysis
of the study, using intermediation approach, reveals the efficiency of Kenyan commercial
banks. However, the efficiency of sample banks showed inefficiency in some areas during the
study period. But small banks showed better efficiency scores during the study period.
Determinants of banks’ profitability in a developing economyAlexander Decker
This document investigates the factors that affect bank profitability in Tanzania. It uses a fixed effects regression model on panel data from 23 banks over the period of 2009 to 2013. The empirical results show that bank-specific factors, which are influenced by bank management decisions, significantly impact bank profitability in Tanzania. However, macroeconomic factors do not seem to significantly affect bank profitability. Therefore, bank profitability in Tanzania is mainly influenced by internal management decisions, while external macroeconomic conditions have an insignificant effect. The study aims to provide insight to policymakers and bank managers on how to improve long-term profitability.
Determinants of Banks’ Financial Performance: A Comparative Study between Nat...inventionjournals
Financial performance is one of the most critical factors having impact on the decision making of the resource providers. And thus to ensure the existence in the ever growing competitive business environment, every institution should be more concerned about the factors affecting their financial performance. This paper specially focuses on identifying the factors having impact on the financial performance of the commercial banks operating in Bangladesh. An effort has also been exerted to determine whether the extent of influence of various factors on financial performance varies with respect to local private and nationalized commercial banks. For this purpose 10 local private commercial banks (PCB) and all nationalized commercial banks (NCB) have been taken covering the period from 2008-2014. Here, data has been collected from the annual reports of the banks under consideration. To draw conclusion a multiple regression has been run by considering financial performance (profitability) as dependent variable and operating efficiency, asset utilization , liquidity, credit risk, capital adequacy and size of the company as independent variables. The study finds that asset utilization and operating efficiency have significant positive impact on banks' financial performance (profitability) whereas credit risk has significant negative impact. However, for PCBs asset utilization is the most critical factor to performance. On the other hand, result shows that in case of NCB 1 taka increase in credit risk is responsible for negative return of 0.968 taka. It is found that financial performance has no significant relationship with size and liquidity of the banks
CREDIT QUALITY IN INDIAN BANKING :QUANTITATIVE EVALUATIONDinabandhu Bag
This document summarizes a study examining factors that influence credit quality and non-performing loans in Indian banking. The study finds:
1) Both economic factors and bank-specific factors like capital adequacy ratios and credit deposit ratios influence credit quality and non-performing assets.
2) Analyzing data from 2002-2007 for 17 major Indian banks, the study finds higher capital adequacy ratios and credit deposit ratios are associated with lower non-performing loans.
3) Stronger economic growth, as measured by GDP growth, is also associated with lower non-performing loans for banks. The results provide insights into how banks can maintain better credit quality.
Credit exposure and lending decision quality of private commercial banks in b...Alexander Decker
This document summarizes a research study that examined the level of credit exposure and lending decision quality of local private commercial banks in Bangladesh from 2007-2011. The study used five financial ratios to measure credit performance: non-performing loan to total loan ratio, loan loss reserve to total loan ratio, loan loss reserve to non-performing loan ratio, capital adequacy ratio, and tier 1 capital ratio. An analysis of variance found that the non-performing loan to total loan ratio, loan loss reserve to total loan ratio, and loan loss reserve to non-performing loan ratio differed significantly between conventional and Islamic banks, while the capital adequacy ratio and tier 1 capital ratio did not differ significantly. The study also found an
Analysis Of The Effect Of Capital, Credit Risk and Profitability To Implementation Banking Intermediation Function(Study On Regional Development Bank All Over Indonesia Year 2012 )
How corporate diversification affects excess value and excess profitabilityAlexander Decker
This document summarizes a study that examined the relationship between excess value and excess profitability among deposit money banks in Nigeria from 1998-2007. The study used regression and correlation analyses of accounting data from 18 sampled banks. The analyses revealed a positive and statistically significant correlation, indicating a relationship between excess value and excess profitability for both diversified and standalone banks. Prior literature on the costs and benefits of corporate diversification was reviewed. The study aimed to measure this relationship for Nigerian banks and hypothesized no significant relationship, which the analyses did not support.
The purpose of this research was to empirically investigate the effect of capital structure on financial sustainability
of deposit-taking micro finance institutions (DTMs) in Kenya. The specific objectives were to determine the impact
of debt on the financial sustainability of DTMs in Kenya, to assess the influence of retained earnings on the financial
sustainability of DTMs in Kenya, to examine the effect of ordinary share capital on the financial sustainability of
MFIs in Kenya, and to investigate the impact of preferred share capital on the financial sustainability of DTMs in
Kenya. The target population of the study was all the 13 DTMs in Kenya registered with the Central Bank of Kenya.
Secondary data was collected on all the DTMs financial data from the Central Bank of Kenya reports. Data was
analyzed using multiple regression model using SPSS and R as the data analysis tool. Based on the findings 76.9%
of the DTMs did not earn enough revenue to cover the actual financing direct costs, which include the total operating
costs, loan loss provisions and the financing costs but excluding the cost of capital. The analysis of variance
(ANOVA) table indicated that the predictor variables influenced the predictor variable significantly at 5%
significance level. Among the four variables; debt and retained earnings were statistically significant variable at 5%
significance level with 1.265 and 1.630 coefficient respectfully. Whereby the financial sustainability change by
1.265 and 1.630 for every unit change of debt or retained earnings respectfully. Therefore, for the deposit-taking
microfinance institutions to remain afloat in the lending business, they should utilize any borrowing opportunity,
plough back profits to the business, and low proportion of preferred share capital. Deposit-taking microfinance
institutions should avoid usage ordinary share capital as it negatively affected financial sustainability
mpact of Foreign Shares to Profitability in Turkish Participation Banksinventionjournals
Covering the period 2006 to 2015, this paper aims at empirically studying the impact of foreign shares on the profitability of participation banks. Several econometrical models have been implemented to reveal this relation among variables. There is no co-integration result between profitability on the one hand, and foreign shares, deposits, loans and equity on the other hand. According to the Granger causality test lag 1, a bidirectional relationship exists between deposits and loans. Meanwhile, a unidirectional relationship exists between profitability and foreign shares.
11.effects and consequences of emphasizing sectoral recovery rate and sectora...Alexander Decker
This document discusses a study analyzing how emphasizing sectoral loan recovery rates and the proportion of loans to certain sectors in Bangladesh Shilpa Bank's (BSB) loan portfolio affects its approval of new project loans. The study conducts empirical tests to examine if this emphasis sacrifices opportunities in profitable sectors or approves loans to highly leveraged sectors. Regression models are developed and tested using data on sectoral loans, recoveries, and financial information of listed companies. The results found a positive relationship between sectoral recovery rates, loan portfolio proportions, and new project approvals, as well as evidence that loans were approved to high debt sectors.
Liquidity, capital adequacy and operating efficiency of commercial banks in k...Alexander Decker
This document summarizes a research journal article that examines the effect of liquidity and capital adequacy on the operating efficiency of commercial banks in Kenya. Specifically, it analyzes how bank liquidity ratios and capital adequacy ratios impact operational efficiency. The study found that the previous year's operational efficiency, liquid assets to short-term liabilities ratio, and total capital ratio positively and significantly affect bank operating efficiency. Regression analysis showed that 41.08% of banks' operational efficiency is explained by the study variables. Therefore, banks should focus on improving liquidity ratios and capital ratios to enhance operating efficiency.
This presentation discusses issues facing forestry across Canada including government policies related to forestry management, forest fires, responses to natural disaster, mitigation of losses, response time to natural disaster, budget cycles and Coordinated responses to forest fires.
This document presents a circuit envelope simulation method for analyzing semiconductor devices. It introduces the theory and implementation of combining harmonic balance and circuit envelope approaches. A test case of a GaAs MESFET is used to demonstrate the method. Signal profiles of displacement current and conduction current are examined under various input signals to identify the physical origins of nonlinearity in the device. The method links signal distortion to device operation and geometry and shows promise for optimizing power amplifiers for wireless applications.
A Comparison of Key Determinants on Profitability of India’s Largest Public a...Rajveer Rawlin
The banking sector in India has come under the scanner following some key changes in monetary policy. With
the Reserve bank of India (RBI) raising interest rates to support the falling Indian currency the Rupee, the cost of
funds of banks has increased significantly. This could manifest itself in rising non-performing assets (NPAs) and
declining profitability. The profitability of banks is impacted by both internal and external factors. This paper is
an attempt to compare the key drivers of profits at India’s largest public and private sector banks. Bank specific
metrics and risk factors were important drivers of profits at both banks. Productivity measures were key drivers
of profits at India’s largest public sector bank SBI but had no effect on profits at India’s largest private sector
bank, HDFC bank. Asset usage efficiency measures were key determinants of profitability at HDFC bank but not
at SBI. The single most important determinant of SBI proved to be business per employee, a productivity
measure while advances and bank size which are traditional bank metrics were key drivers of profits at HDFC
bank. Managers at both banks and their share holders thus can look at these drivers to develop a broad
understanding of profitability at the two banks.
The aims of the paper are to study the financial performance between the independent finance companies and the
integrated finance companies over the period 2001-2011.
An analysis of the impact of mergers and acquisitions on commercial banks per...Alexander Decker
This document analyzes the impact of mergers and acquisitions on commercial banks in Nigeria. It discusses how the Central Bank of Nigeria introduced reforms in 2004 that required banks to increase their minimum capital to 25 billion naira by 2005. This led to over 80% of banks merging into 25 banks, while 14 banks that did not meet the requirement were liquidated. The document examines whether these mergers improved bank performance in terms of profitability, capitalization, and earnings per share. It also discusses the theoretical background and history of bank recapitalization in Nigeria.
Financial reporting quality has been said to play an important role in reducing information asymmetry. Thus, firms with high financial reporting quality may enhance more investors’ decision. Hence, the basic objective of this study is to determine whether earnings quality influence investors’ decision. The sample consisted of 10 manufacturing companies listed on the Nigerian Stock Exchange Market. The study period is 5 years (2010-2014). Data on accrual quality, volume of investment, Size, age and growth rate and earnings per share were drawn from the published annual report and accounts of the sampled companies. Correlation matrix, Vector auto regressive estimation and Pooled OLS model were employed for the analysis. Diagnostic tests for post estimation were also performed on the model. The result of the Ramsey Reset test shows a p-value of 0.2105, implying that model has no omitted variables. Also, Wooldridge test for autocorrelation in panel data indicates no first-order autocorrelation, showing a p-value of 0.3642. We calculated accruals quality based on the modified accrual model proposed by Mac Nichols in 2002. In this paper, the absolute value of residual error represents the financial reporting quality. This threshold is based on the idea that accruals reduce the smoothing initiated by the change in the cash flow and thus increase the earnings awareness. The study finds evidence of a positive association between investors’ decision and financial reporting quality.
052 om c-dhanapal&gganesan-measuring_operational_efficiency_of (1) (1)Anil Aks
This document summarizes a study that measures the operational efficiency of public sector banks in India. It analyzes factors that influence banks' profitability using regression analysis. The study finds that non-performing assets, total income, total expenses, and net interest margin are significant factors. It also uses data envelopment analysis to benchmark the relative efficiency of 21 public sector banks over 5 years. The results show that return on assets, net interest margin, non-performing loans, cost-to-income ratio, advances to deposits ratio, and capital adequacy ratio influence banks' profitability.
Determinants of commercial banks profitability panel data evidence from pakistanAlexander Decker
This document summarizes a research study that investigated the determinants of commercial bank profitability in Pakistan from 2004-2010. The researchers used multiple regression analysis on a sample of 5 major commercial banks to determine the relationship between return on assets (the dependent variable) and various internal and external independent variables. The results indicated that internal factors like liquidity, efficiency, asset composition, deposit composition, and external factors like firm size had a significant impact on bank profitability. The study adds to the limited literature on factors influencing bank performance in Pakistan.
This document discusses a study on the effect of capital structure on the profitability of conventional and Islamic banks in Pakistan. The study examines the relationship between capital structure factors like total liabilities to total assets, total equity to total assets, total liabilities to total equities, and bank size with profitability measures like return on equity and return on assets. Annual reports from 5 Islamic banks and 5 conventional banks between 2010-2014 are analyzed using statistical tools like correlation analysis and t-tests. The study aims to compare the capital structure and its impact on profitability between conventional and Islamic banks in Pakistan and help policymakers. Limitations and the thesis structure are also outlined.
This study aims to find the efficiency of selected Kenyan sample commercial banks. As the
banking industry is the main sector that contributes significantly to the development of the
national economy and hence the efficiency of commercial banks gains significantly. The analysis
of the study, using intermediation approach, reveals the efficiency of Kenyan commercial
banks. However, the efficiency of sample banks showed inefficiency in some areas during the
study period. But small banks showed better efficiency scores during the study period.
Determinants of banks’ profitability in a developing economyAlexander Decker
This document investigates the factors that affect bank profitability in Tanzania. It uses a fixed effects regression model on panel data from 23 banks over the period of 2009 to 2013. The empirical results show that bank-specific factors, which are influenced by bank management decisions, significantly impact bank profitability in Tanzania. However, macroeconomic factors do not seem to significantly affect bank profitability. Therefore, bank profitability in Tanzania is mainly influenced by internal management decisions, while external macroeconomic conditions have an insignificant effect. The study aims to provide insight to policymakers and bank managers on how to improve long-term profitability.
Determinants of Banks’ Financial Performance: A Comparative Study between Nat...inventionjournals
Financial performance is one of the most critical factors having impact on the decision making of the resource providers. And thus to ensure the existence in the ever growing competitive business environment, every institution should be more concerned about the factors affecting their financial performance. This paper specially focuses on identifying the factors having impact on the financial performance of the commercial banks operating in Bangladesh. An effort has also been exerted to determine whether the extent of influence of various factors on financial performance varies with respect to local private and nationalized commercial banks. For this purpose 10 local private commercial banks (PCB) and all nationalized commercial banks (NCB) have been taken covering the period from 2008-2014. Here, data has been collected from the annual reports of the banks under consideration. To draw conclusion a multiple regression has been run by considering financial performance (profitability) as dependent variable and operating efficiency, asset utilization , liquidity, credit risk, capital adequacy and size of the company as independent variables. The study finds that asset utilization and operating efficiency have significant positive impact on banks' financial performance (profitability) whereas credit risk has significant negative impact. However, for PCBs asset utilization is the most critical factor to performance. On the other hand, result shows that in case of NCB 1 taka increase in credit risk is responsible for negative return of 0.968 taka. It is found that financial performance has no significant relationship with size and liquidity of the banks
CREDIT QUALITY IN INDIAN BANKING :QUANTITATIVE EVALUATIONDinabandhu Bag
This document summarizes a study examining factors that influence credit quality and non-performing loans in Indian banking. The study finds:
1) Both economic factors and bank-specific factors like capital adequacy ratios and credit deposit ratios influence credit quality and non-performing assets.
2) Analyzing data from 2002-2007 for 17 major Indian banks, the study finds higher capital adequacy ratios and credit deposit ratios are associated with lower non-performing loans.
3) Stronger economic growth, as measured by GDP growth, is also associated with lower non-performing loans for banks. The results provide insights into how banks can maintain better credit quality.
Credit exposure and lending decision quality of private commercial banks in b...Alexander Decker
This document summarizes a research study that examined the level of credit exposure and lending decision quality of local private commercial banks in Bangladesh from 2007-2011. The study used five financial ratios to measure credit performance: non-performing loan to total loan ratio, loan loss reserve to total loan ratio, loan loss reserve to non-performing loan ratio, capital adequacy ratio, and tier 1 capital ratio. An analysis of variance found that the non-performing loan to total loan ratio, loan loss reserve to total loan ratio, and loan loss reserve to non-performing loan ratio differed significantly between conventional and Islamic banks, while the capital adequacy ratio and tier 1 capital ratio did not differ significantly. The study also found an
Analysis Of The Effect Of Capital, Credit Risk and Profitability To Implementation Banking Intermediation Function(Study On Regional Development Bank All Over Indonesia Year 2012 )
How corporate diversification affects excess value and excess profitabilityAlexander Decker
This document summarizes a study that examined the relationship between excess value and excess profitability among deposit money banks in Nigeria from 1998-2007. The study used regression and correlation analyses of accounting data from 18 sampled banks. The analyses revealed a positive and statistically significant correlation, indicating a relationship between excess value and excess profitability for both diversified and standalone banks. Prior literature on the costs and benefits of corporate diversification was reviewed. The study aimed to measure this relationship for Nigerian banks and hypothesized no significant relationship, which the analyses did not support.
The purpose of this research was to empirically investigate the effect of capital structure on financial sustainability
of deposit-taking micro finance institutions (DTMs) in Kenya. The specific objectives were to determine the impact
of debt on the financial sustainability of DTMs in Kenya, to assess the influence of retained earnings on the financial
sustainability of DTMs in Kenya, to examine the effect of ordinary share capital on the financial sustainability of
MFIs in Kenya, and to investigate the impact of preferred share capital on the financial sustainability of DTMs in
Kenya. The target population of the study was all the 13 DTMs in Kenya registered with the Central Bank of Kenya.
Secondary data was collected on all the DTMs financial data from the Central Bank of Kenya reports. Data was
analyzed using multiple regression model using SPSS and R as the data analysis tool. Based on the findings 76.9%
of the DTMs did not earn enough revenue to cover the actual financing direct costs, which include the total operating
costs, loan loss provisions and the financing costs but excluding the cost of capital. The analysis of variance
(ANOVA) table indicated that the predictor variables influenced the predictor variable significantly at 5%
significance level. Among the four variables; debt and retained earnings were statistically significant variable at 5%
significance level with 1.265 and 1.630 coefficient respectfully. Whereby the financial sustainability change by
1.265 and 1.630 for every unit change of debt or retained earnings respectfully. Therefore, for the deposit-taking
microfinance institutions to remain afloat in the lending business, they should utilize any borrowing opportunity,
plough back profits to the business, and low proportion of preferred share capital. Deposit-taking microfinance
institutions should avoid usage ordinary share capital as it negatively affected financial sustainability
mpact of Foreign Shares to Profitability in Turkish Participation Banksinventionjournals
Covering the period 2006 to 2015, this paper aims at empirically studying the impact of foreign shares on the profitability of participation banks. Several econometrical models have been implemented to reveal this relation among variables. There is no co-integration result between profitability on the one hand, and foreign shares, deposits, loans and equity on the other hand. According to the Granger causality test lag 1, a bidirectional relationship exists between deposits and loans. Meanwhile, a unidirectional relationship exists between profitability and foreign shares.
11.effects and consequences of emphasizing sectoral recovery rate and sectora...Alexander Decker
This document discusses a study analyzing how emphasizing sectoral loan recovery rates and the proportion of loans to certain sectors in Bangladesh Shilpa Bank's (BSB) loan portfolio affects its approval of new project loans. The study conducts empirical tests to examine if this emphasis sacrifices opportunities in profitable sectors or approves loans to highly leveraged sectors. Regression models are developed and tested using data on sectoral loans, recoveries, and financial information of listed companies. The results found a positive relationship between sectoral recovery rates, loan portfolio proportions, and new project approvals, as well as evidence that loans were approved to high debt sectors.
Liquidity, capital adequacy and operating efficiency of commercial banks in k...Alexander Decker
This document summarizes a research journal article that examines the effect of liquidity and capital adequacy on the operating efficiency of commercial banks in Kenya. Specifically, it analyzes how bank liquidity ratios and capital adequacy ratios impact operational efficiency. The study found that the previous year's operational efficiency, liquid assets to short-term liabilities ratio, and total capital ratio positively and significantly affect bank operating efficiency. Regression analysis showed that 41.08% of banks' operational efficiency is explained by the study variables. Therefore, banks should focus on improving liquidity ratios and capital ratios to enhance operating efficiency.
This presentation discusses issues facing forestry across Canada including government policies related to forestry management, forest fires, responses to natural disaster, mitigation of losses, response time to natural disaster, budget cycles and Coordinated responses to forest fires.
This document presents a circuit envelope simulation method for analyzing semiconductor devices. It introduces the theory and implementation of combining harmonic balance and circuit envelope approaches. A test case of a GaAs MESFET is used to demonstrate the method. Signal profiles of displacement current and conduction current are examined under various input signals to identify the physical origins of nonlinearity in the device. The method links signal distortion to device operation and geometry and shows promise for optimizing power amplifiers for wireless applications.
The 65th edition of the BP Statistical Review of World Energy sets out energy data for 2015, revealing a year in which significant long-term trends in both the global demand and supply of energy came to the fore with global energy consumption slowing further and the mix of energy sources shifting towards lower-carbon fuels.
The April meeting of the Houston Netsquared featured guest speaker Jeff D. Frey from Rice University. Jeff shared the pros and cons of open source technology for nonprofits plus gave some recommendations to open source software, including Tendenci the open source CMS for nonprofit websites.
International Journal of Business and Management Invention (IJBMI)inventionjournals
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
The Journal will bring together leading researchers, engineers and scientists in the domain of interest from around the world. Topics of interest for submission include, but are not limited to
This document provides a summary of BP's first quarter 2016 results webcast and conference call. It includes an introduction by Jess Mitchell, Head of Investor Relations, and Brian Gilvary, Chief Financial Officer. Gilvary discusses BP's financial results for the first quarter, including lower underlying replacement cost profit of $530 million due to a weaker price environment. He also provides updates on BP's cost reduction progress, capital expenditure plans, and expectations for balancing organic cash flows by 2017 at oil prices of $50-55 per barrel.
Bankers perceptions of electronic banking in nigeriaAlexander Decker
This document summarizes a research journal article about bankers' perceptions of electronic banking in Nigeria following the consolidation of Nigerian banks. The article reviews literature on electronic banking and examines bankers' attitudes and perceptions. It finds that bankers perceive benefits like reducing transaction costs and saving customer time, but also risks like increased fraud potential and lack of security. The consolidation era saw growth in electronic banking adoption. The study aims to understand bankers' views of electronic banking's benefits and risks, and Nigeria's transition to a less cash-based economy through increased digital payment options.
The annual Energy Outlook reflects our best effort to describe a “most likely” trajectory of the global energy system, based on our views of likely economic and population growth, as well as developments in policy and technology
This 2015 edition updates our view of the likely path of global energy markets to 2035. We make assumptions on changes in policy, technology and the economy, based on extensive internal and external consultations, using a range of analytical tools to build a single “most likely” view.
The Outlook highlights the continuous change in the energy system – the changing fuel mix, the changing patterns of trade – as it adapts to meet the world’s growing energy needs. It also highlights the challenge of delivering energy supplies which are sustainable, secure and affordable. The Outlook emphasizes the role of competition and market forces in driving technology and innovation to help us meet that challenge.
A day in the life of the BP Carteret fuel terminal bp
Located in the New York Harbour area, BP’s Carteret terminal is a major hub for fuel supply on the US East Coast. Every day, thousands of gallons of gasoline and diesel are transported, blended and stored by the Carteret team and then shipped out to serve the largest metropolitan area in the United States.
Full research behind the presentation "Fortune 100 CEOs are Social Media Slackers". It shows how the most powerful CEOs are disconnected from Twitter, LinkedIn and Facebook.
The document provides an overview and executive summary of BP's 2016 Energy Outlook. Key points include:
- Global GDP and population are projected to more than double by 2035, driving increased energy demand.
- Fossil fuels remain dominant but their share declines as gas and renewables grow rapidly. Gas becomes the fastest growing fossil fuel.
- China's energy growth slows significantly, weighing on coal demand, while India accounts for over a quarter of increased demand by 2035.
- Oil demand grows by almost 20 Mb/d led by Asia, met by increased non-OPEC supply, while emissions growth rate more than halves.
The annual Energy Outlook reflects our best effort to describe a “most likely” trajectory of the global energy system, based on our views of likely economic and population growth, as well as developments in policy and technology
This 2015 edition updates our view of the likely path of global energy markets to 2035. We make assumptions on changes in policy, technology and the economy, based on extensive internal and external consultations, using a range of analytical tools to build a single “most likely” view.
The Outlook highlights the continuous change in the energy system – the changing fuel mix, the changing patterns of trade – as it adapts to meet the world’s growing energy needs. It also highlights the challenge of delivering energy supplies which are sustainable, secure and affordable. The Outlook emphasizes the role of competition and market forces in driving technology and innovation to help us meet that challenge.
Mergers and acquisitions can occur for several strategic and financial reasons. There are three main types of mergers: horizontal, vertical, and conglomerate. A merger happens when two companies combine, while an acquisition occurs when one company purchases another. Successful mergers and acquisitions require thorough planning and integration of the combining organizations.
BP Oman, along with implementing partners, has
launched over 20 social investment programmes that
have so far benefitted 33,727 people. Find out more about them here
- BP reported a 30% increase in underlying replacement cost profit from $0.7 billion in 2Q16 to $0.9 billion in 3Q16. Underlying operating cash flow declined 12% year-on-year to $4.8 billion.
- Upstream underlying RCPBIT was flat at $0 billion compared to a loss of $0.7 billion in 2Q16. Downstream underlying RCPBIT increased to $1.4 billion from $1.5 billion in 2Q16.
- BP expects to balance organic sources and uses of cash at $50-55/bbl Brent by 2017 and deliver organic free cash flow growth thereafter through cost reductions and performance improvement. Capital
The Energy Outlook sets out a base case which outlines the 'most likely' path for global energy markets until 2035, based on assumptions and judgments about future changes in policy, technology and the economy. The Outlook also develops alternative cases to explore key uncertainties
The six main steps to build an oil platform are:
1. Long steel tubes are welded together to form the frame or "jacket" which is towed out to the field and secured onto the seabed.
2. The topsides structure is constructed separately with equipment and then floated over and lowered onto the secured jacket.
3. After construction of the multi-decked topsides is completed by connecting all pipework and equipment, it is loaded onto a barge for transport.
International Journal of Business and Management Invention (IJBMI)inventionjournals
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online
This document summarizes a research study that examined the influence of firm size on the financial performance of deposit money banks quoted on the Nigerian stock exchange from 2005 to 2016. The study used a sample of 5 banks and measured firm size as the log of total assets and financial performance as return on assets. Descriptive statistics and correlation analysis were conducted. The results of the regression analyses showed that firm size had an insignificant negative influence on financial performance, indicating diseconomies of scale. The study recommends that banks minimize expansion costs and maximize economies of scale to stimulate financial performance.
Assessing the effect of liquidity on profitability of commercial banks in kenyaAlexander Decker
This document discusses factors that affect the profitability of commercial banks in Kenya. It provides background on the banking sector in Kenya and reviews various theories on factors that influence bank profitability. The study aimed to determine the effect of internal factors like liquidity on the profitability of commercial banks in Kenya. It employed a descriptive research design using secondary data from the annual reports of 43 commercial banks over a 5-year period from 2009 to 2013. The findings showed that liquidity had a statistically significant positive relationship with bank profitability. The document provides context on theories of bank profitability and the motivation and methodology of the study.
Working Capital Management and Bank profitability in GhanaSamuel Agyei
This document examines the relationship between working capital management practices and profitability of banks in Ghana. It reviews previous empirical studies that have mostly found efficient working capital management, like reducing cash conversion cycles and accounts receivable periods, improves firm profitability. The study uses panel data and random effects techniques to analyze this relationship for Ghanaian banks. Preliminary findings contradict some prior studies by showing cash operating cycles and debtors collection periods positively relate to bank profitability, while creditors payment periods negatively relate to it. The study aims to inform bank managers and policymakers on effective working capital strategies.
An empirical assessment of the effect of corporate restructuring in the banki...Alexander Decker
This document summarizes a study that empirically assessed the effect of corporate restructuring in Nigeria's banking industry on economic growth from 1990-2009. The study found that foreign direct investment, aggregate capital to the private sector, pre-tax profits for all banks, and number of bank employees significantly influenced economic growth in Nigeria. It recommends that the Central Bank of Nigeria encourage banks to invest profits in the real economy to boost productive capacity and growth. The introduction provides background on banking industry restructuring through mergers and acquisitions in Nigeria and their theoretical drivers of economic growth.
Finance companies, central bank of nigeria and economic developmentAlexander Decker
This document summarizes an empirical study that examines the relationship between Central Bank of Nigeria (CBN) regulatory activities, finance house activities, and economic development in Nigeria from 1992-2010. It uses gross domestic product (GDP) as a measure of economic development and proxies CBN activities with minimum paid up capital and shareholders fund, and finance house activities with domestic credit and total assets. The study finds that a significant relationship exists between finance house activities and economic development, but that CBN regulatory activities have no significant relationship with finance house operations. It recommends policies to encourage existing finance houses and license new ones to better support Nigeria's overall economy.
Corporate governance is of great importance for financial performance. Corporate governance issues have attracted public interest in the financial sector both locally and internationally after waves of corporate rip-offs and failures that almost led to loss of confidence in the finance sector. The general objective of this study was to determine the effect of corporate governance on financial performance of Savings and Credit Co-operatives in Kenya. The study adopted a descriptive research design. The study targeted a population of 65 active Savings and credit Co-operatives operating in Embu County. A sample size of 57 Savings and Credit Co-operatives was used in this study. Stratified sampling technique was used to select the sample. Primary data was collected using self-administered semi-structured questionnaires while secondary data was obtained from financial statements and periodicals using a record survey sheet. Pre-testing of research tool was conducted before the actual data collection was carried, to determine the reliability of the questionnaire by use of a Cronbach‘s alpha, statistical coefficient, while the validity was tested to ensure that the questions in the questionnaire provides adequate coverage to the investigative questions. Correlation and multiple regression analysis was used to establish the relationship between independent and dependent variables. The study findings indicated that corporate governance positively affected the financial performance. In specific the board composition and corporate risk management for SACCOs had a positive effect on the financial performances of the SACCOs. The study is beneficial to SACCOs management in improving the performance of Savings and Credit Co-operatives and enabling them to compete globally. The study recommends gender parity consideration and balanced mix of skilled board members during appointments of the board members. The recommendations are important to the government, especially the department of cooperatives in strengthening policies regarding cooperative societies.
EFFECTS OF MANAGEMENT PROFICIENCY ON FINANCIAL PERFORMANCE OF FOREIGN COMMERC...AkashSharma618775
The study sought to examine Management Proficiency on financial performance of foreign
commercial banks in Kenya from period of 2013 to 2019.
Design/Methodology/Approach; The return on equity (ROE) and return on asset (ROA) were used as measure on
measure of financial performance measures on foreign commercial banks in Kenya. The descriptive, correlation
and panel regression analysis based on fixed effect model with help STATA.
The Results; It indicated that an R squared of 0.6956 was obtained that implies that 69.56 percent of the variations
in financial performance of foreign commercial banks in Kenya was accredited to capital adequacy, asset quality
and management efficiency. A p-value of 0.0000 further endorsed that the variables that were used namely: capital
adequacy, asset quality and management efficiency had significant effect predicting the financial performance of
foreign commercial banks in Kenya. The model had a constant value of 0.87 thus inferred that in the absence of
capital adequacy, asset quality and management efficiency, the value of financial performance of foreign
commercial banks in Kenya was 0.87.
Originality/value: The main study objective was to provide the empirical evidence on management proficiency on
financial performance on foreign commercial banks in Kenya and demanded literature gaps
Determinants of corporate profitability in developing economiesAlexander Decker
This document analyzes the determinants of corporate profitability in developing economies, specifically Nigeria. A study was conducted using data from 40 randomly selected companies over 5 years. The study found positive relationships between firm size and financial leverage with corporate profitability. Capital structure and cash liquidity were found to have negative relationships with corporate profitability. The study recommended using different profitability indices and including additional variables to improve the model.
An analysis of loan portfolio management on organization profitability case o...Alexander Decker
This document summarizes a research study that investigated the determinants of profitability among commercial banks in Kenya. Specifically, it examined the impact of loan portfolio management, interest expenses, and administrative costs on bank profitability.
The introduction provides background on the important role of banks in financing economic activity and intermediating funds. It also discusses previous research that has identified various internal and external factors that influence bank profitability, including capital ratios, loan loss provisions, interest rates, and expense control.
The document then reviews literature related to the factors being studied - loan portfolio and its relationship to bank liquidity and risk/profit tradeoffs, how interest rates impact bank revenues and yields, and the link between administrative costs and managerial
Capital structure and the operating performance of quoted firms in the nigeri...Alexander Decker
This study examines the impact of capital structure on the performance of quoted firms in the Nigerian Stock Exchange from 2005-2011. The researcher analyzes the relationship between performance measures like return on asset (ROA) and return on equity (ROE) with short-term debt, long-term debt, and total debt. Control variables like tangibility, liquidity, non-debt tax, and efficiency that influence performance are also analyzed. The results show that short-term debt, long-term debt, and total debt have a significant negative relationship with performance, while tangibility and efficiency have a positive relationship. Non-debt tax and liquidity show a negative relationship with performance. The study concludes that capital structure affects firm performance
This document summarizes a study that examined the determinants of commercial bank lending in Ethiopia between 2005-2011. The study tested whether bank size, credit risk, GDP, investment, deposit, interest rate, liquidity ratio, and cash reserve requirements influenced bank lending. It found that bank size, credit risk, GDP, and liquidity ratio had a significant relationship with lending, but deposit, investment, interest rate, and cash reserves did not. The study suggests banks focus on managing credit risk and liquidity to support lending.
This document is a research paper that examines the impact of capital structure on the profitability of banking sectors in Pakistan. It analyzes data from 4 conventional banks and 4 Islamic banks over 19 years. The results show that for conventional banks, profitability is positively affected by capital structure, indicating a positive relationship between profitability and capital structure. However, for Islamic banks profitability is negatively affected by capital structure, showing a negative relationship between profitability and capital structure. The paper aims to contribute to understanding how capital structure impacts profitability differently between conventional and Islamic banking.
Trend analysis of the effect of capital base requirement on profit generating...Alexander Decker
This document summarizes a research study examining the relationship between capital base requirements and the profitability and operational efficiency of commercial banks in Nigeria from 1992 to 2007. The study utilized secondary data on key performance indicators of banks such as total income, interest rates, total credits, and branch networks. Descriptive statistical techniques were used to analyze trends in these indicators in relation to changes in bank capital levels over the period. The results showed that capital base requirements in Nigeria were ineffective in reducing banking distress and that requirements often lagged average capital levels. The study concluded that increasing capital base requirements through regulatory power could stimulate greater profitability and efficiency in the Nigerian banking sector.
Working capital management and the performance of selected quoted manufacturi...Alexander Decker
This study examines the relationship between working capital management and the performance of selected quoted manufacturing companies in Nigeria from 2000-2009. Secondary data was collected from annual reports of 60 companies and analyzed using descriptive and inferential statistics. The results showed that average collection period and average payment period were positively related to profitability, while inventory turnover days and cash conversion cycle were negatively related. This implies reducing cash conversion cycle, inventory days, and net trading cycle can increase profits, while increasing average collection and payment periods can also boost profits. In conclusion, efficient working capital management affects the performance of manufacturing firms in Nigeria.
Complementarity of Equity and Debt Capital on Profitability of Quoted Consume...ijtsrd
This study ascertained the complementarity of equity and debt capital of quoted consumer goods companies in Nigeria from 2011 2021. Specifically, the study determined the effect of shareholders’ equity and total liabilities on return on assets, return on equity and earnings per share. Purposive sampling technique was employed to select fourteen 14 consumer goods companies from a population of twenty three 23 quoted consumer goods firms in Nigeria. Panel data were used in this study, which were obtained from the annual reports and accounts of sample firms for the periods 2011 2021. Ex Post Facto research design was employed. Descriptive statistics of the dataset from the sample firms were described using the mean, standard deviation, minimum and maximum values of the data for the study variables. Inferential statistics using Multicollinearity test, Pearson correlation coefficient and Panel least square regression analysis were applied to test the hypotheses of the study. The results showed that shareholders’ equity has a positive and significant effect on ROA, ROE and EPS respectively at 5 level of significance, while total liabilities has a negative and significant effect on ROA, ROE and EPS, however, significant at 5 level of significance. This study recommended amongst others that an appropriate mix of equity and debt capital should be adopted in order to increase the profitability of consumer goods firms. Chibuike Charles Okudo | Amahalu, Nestor Ndubuisi | Samuel Oshiole "Complementarity of Equity and Debt Capital on Profitability of Quoted Consumer Goods Firms in Nigeria" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-7 | Issue-2 , April 2023, URL: https://www.ijtsrd.com.com/papers/ijtsrd55070.pdf Paper URL: https://www.ijtsrd.com.com/management/accounting-and-finance/55070/complementarity-of-equity-and-debt-capital-on-profitability-of-quoted-consumer-goods-firms-in-nigeria/chibuike-charles-okudo
Effect of Financial Ratios on Firm Performance Study of Selected Brewery Firm...ijtsrd
The study assessed the effect of financial ratios on performance of Quoted Breweries firms in Nigeria. It made use of ex post facto research design. Data were gotten from secondary sources obtained from NSE fact books and annual reports accounts of the selected Breweries Companies. The population of the study consisted of thirteen 13 quoted Breweries firms listed on the Nigerian Stock Exchange as at 31st December, 2018. Four 4 of the quoted Breweries firms are selected to form the sample of the study for the period of nine 9 years 2010 – 2018 . The relevant data obtained were subjected to statistical analysis using Pearson correlation coefficient and regression analysis. The results of this study revealed that there is a significant relationship between current ratio and firm performance but negative effect. Debt equity ratio has a significant effect on return on asset of Nigerian Breweries. The result of the study concludes that Nigerian breweries companies are relatively using an optimal mix of debt to equity which is evident from the significant positive relationship of debt equity ratio with financial performance of the Nigerian Breweries. The researchers recommended that the management should employ all carefulness while financing with long term debt instruments endeavor to find out the best and optimal combination of long term debt and equity that will impact positively on the value of the firm. Agbata, Amaka Elizabeth | Osingor, Arinze Stanley | Ezeala, George "Effect of Financial Ratios on Firm Performance: Study of Selected Brewery Firms in Nigeria" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-5 | Issue-5 , August 2021, URL: https://www.ijtsrd.com/papers/ijtsrd45177.pdf Paper URL: https://www.ijtsrd.com/management/accounting-and-finance/45177/effect-of-financial-ratios-on-firm-performance-study-of-selected-brewery-firms-in-nigeria/agbata-amaka-elizabeth
Asset liability management and commercial banks profitability in ethiopiaAlexander Decker
The document examines the effect of asset liability management (ALM) on the profitability of commercial banks in Ethiopia. It uses a statistical cost accounting (SCA) model to analyze the relationship between banks' profitability, measured by return on assets (ROA), and their balance sheet items like loans, deposits and other assets/liabilities. The analysis finds that most assets positively impact profitability while liabilities generally have a negative effect. It also incorporates macroeconomic variables like GDP growth and inflation, finding GDP has a negative influence on bank profits. The study aims to help banks and policymakers better understand factors affecting bank performance in Ethiopia's developing financial system.
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Abnormalities of hormones and inflammatory cytokines in women affected with p...Alexander Decker
Women with polycystic ovary syndrome (PCOS) have elevated levels of hormones like luteinizing hormone and testosterone, as well as higher levels of insulin and insulin resistance compared to healthy women. They also have increased levels of inflammatory markers like C-reactive protein, interleukin-6, and leptin. This study found these abnormalities in the hormones and inflammatory cytokines of women with PCOS ages 23-40, indicating that hormone imbalances associated with insulin resistance and elevated inflammatory markers may worsen infertility in women with PCOS.
A usability evaluation framework for b2 c e commerce websitesAlexander Decker
This document presents a framework for evaluating the usability of B2C e-commerce websites. It involves user testing methods like usability testing and interviews to identify usability problems in areas like navigation, design, purchasing processes, and customer service. The framework specifies goals for the evaluation, determines which website aspects to evaluate, and identifies target users. It then describes collecting data through user testing and analyzing the results to identify usability problems and suggest improvements.
A universal model for managing the marketing executives in nigerian banksAlexander Decker
This document discusses a study that aimed to synthesize motivation theories into a universal model for managing marketing executives in Nigerian banks. The study was guided by Maslow and McGregor's theories. A sample of 303 marketing executives was used. The results showed that managers will be most effective at motivating marketing executives if they consider individual needs and create challenging but attainable goals. The emerged model suggests managers should provide job satisfaction by tailoring assignments to abilities and monitoring performance with feedback. This addresses confusion faced by Nigerian bank managers in determining effective motivation strategies.
A unique common fixed point theorems in generalized dAlexander Decker
This document presents definitions and properties related to generalized D*-metric spaces and establishes some common fixed point theorems for contractive type mappings in these spaces. It begins by introducing D*-metric spaces and generalized D*-metric spaces, defines concepts like convergence and Cauchy sequences. It presents lemmas showing the uniqueness of limits in these spaces and the equivalence of different definitions of convergence. The goal of the paper is then stated as obtaining a unique common fixed point theorem for generalized D*-metric spaces.
A trends of salmonella and antibiotic resistanceAlexander Decker
This document provides a review of trends in Salmonella and antibiotic resistance. It begins with an introduction to Salmonella as a facultative anaerobe that causes nontyphoidal salmonellosis. The emergence of antimicrobial-resistant Salmonella is then discussed. The document proceeds to cover the historical perspective and classification of Salmonella, definitions of antimicrobials and antibiotic resistance, and mechanisms of antibiotic resistance in Salmonella including modification or destruction of antimicrobial agents, efflux pumps, modification of antibiotic targets, and decreased membrane permeability. Specific resistance mechanisms are discussed for several classes of antimicrobials.
A transformational generative approach towards understanding al-istifhamAlexander Decker
This document discusses a transformational-generative approach to understanding Al-Istifham, which refers to interrogative sentences in Arabic. It begins with an introduction to the origin and development of Arabic grammar. The paper then explains the theoretical framework of transformational-generative grammar that is used. Basic linguistic concepts and terms related to Arabic grammar are defined. The document analyzes how interrogative sentences in Arabic can be derived and transformed via tools from transformational-generative grammar, categorizing Al-Istifham into linguistic and literary questions.
A time series analysis of the determinants of savings in namibiaAlexander Decker
This document summarizes a study on the determinants of savings in Namibia from 1991 to 2012. It reviews previous literature on savings determinants in developing countries. The study uses time series analysis including unit root tests, cointegration, and error correction models to analyze the relationship between savings and variables like income, inflation, population growth, deposit rates, and financial deepening in Namibia. The results found inflation and income have a positive impact on savings, while population growth negatively impacts savings. Deposit rates and financial deepening were found to have no significant impact. The study reinforces previous work and emphasizes the importance of improving income levels to achieve higher savings rates in Namibia.
A therapy for physical and mental fitness of school childrenAlexander Decker
This document summarizes a study on the importance of exercise in maintaining physical and mental fitness for school children. It discusses how physical and mental fitness are developed through participation in regular physical exercises and cannot be achieved solely through classroom learning. The document outlines different types and components of fitness and argues that developing fitness should be a key objective of education systems. It recommends that schools ensure pupils engage in graded physical activities and exercises to support their overall development.
A theory of efficiency for managing the marketing executives in nigerian banksAlexander Decker
This document summarizes a study examining efficiency in managing marketing executives in Nigerian banks. The study was examined through the lenses of Kaizen theory (continuous improvement) and efficiency theory. A survey of 303 marketing executives from Nigerian banks found that management plays a key role in identifying and implementing efficiency improvements. The document recommends adopting a "3H grand strategy" to improve the heads, hearts, and hands of management and marketing executives by enhancing their knowledge, attitudes, and tools.
This document discusses evaluating the link budget for effective 900MHz GSM communication. It describes the basic parameters needed for a high-level link budget calculation, including transmitter power, antenna gains, path loss, and propagation models. Common propagation models for 900MHz that are described include Okumura model for urban areas and Hata model for urban, suburban, and open areas. Rain attenuation is also incorporated using the updated ITU model to improve communication during rainfall.
A synthetic review of contraceptive supplies in punjabAlexander Decker
This document discusses contraceptive use in Punjab, Pakistan. It begins by providing background on the benefits of family planning and contraceptive use for maternal and child health. It then analyzes contraceptive commodity data from Punjab, finding that use is still low despite efforts to improve access. The document concludes by emphasizing the need for strategies to bridge gaps and meet the unmet need for effective and affordable contraceptive methods and supplies in Punjab in order to improve health outcomes.
A synthesis of taylor’s and fayol’s management approaches for managing market...Alexander Decker
1) The document discusses synthesizing Taylor's scientific management approach and Fayol's process management approach to identify an effective way to manage marketing executives in Nigerian banks.
2) It reviews Taylor's emphasis on efficiency and breaking tasks into small parts, and Fayol's focus on developing general management principles.
3) The study administered a survey to 303 marketing executives in Nigerian banks to test if combining elements of Taylor and Fayol's approaches would help manage their performance through clear roles, accountability, and motivation. Statistical analysis supported combining the two approaches.
A survey paper on sequence pattern mining with incrementalAlexander Decker
This document summarizes four algorithms for sequential pattern mining: GSP, ISM, FreeSpan, and PrefixSpan. GSP is an Apriori-based algorithm that incorporates time constraints. ISM extends SPADE to incrementally update patterns after database changes. FreeSpan uses frequent items to recursively project databases and grow subsequences. PrefixSpan also uses projection but claims to not require candidate generation. It recursively projects databases based on short prefix patterns. The document concludes by stating the goal was to find an efficient scheme for extracting sequential patterns from transactional datasets.
A survey on live virtual machine migrations and its techniquesAlexander Decker
This document summarizes several techniques for live virtual machine migration in cloud computing. It discusses works that have proposed affinity-aware migration models to improve resource utilization, energy efficient migration approaches using storage migration and live VM migration, and a dynamic consolidation technique using migration control to avoid unnecessary migrations. The document also summarizes works that have designed methods to minimize migration downtime and network traffic, proposed a resource reservation framework for efficient migration of multiple VMs, and addressed real-time issues in live migration. Finally, it provides a table summarizing the techniques, tools used, and potential future work or gaps identified for each discussed work.
A survey on data mining and analysis in hadoop and mongo dbAlexander Decker
This document discusses data mining of big data using Hadoop and MongoDB. It provides an overview of Hadoop and MongoDB and their uses in big data analysis. Specifically, it proposes using Hadoop for distributed processing and MongoDB for data storage and input. The document reviews several related works that discuss big data analysis using these tools, as well as their capabilities for scalable data storage and mining. It aims to improve computational time and fault tolerance for big data analysis by mining data stored in Hadoop using MongoDB and MapReduce.
1. The document discusses several challenges for integrating media with cloud computing including media content convergence, scalability and expandability, finding appropriate applications, and reliability.
2. Media content convergence challenges include dealing with the heterogeneity of media types, services, networks, devices, and quality of service requirements as well as integrating technologies used by media providers and consumers.
3. Scalability and expandability challenges involve adapting to the increasing volume of media content and being able to support new media formats and outlets over time.
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Enhancing Asset Quality: Strategies for Financial Institutions
Empirical analysis of the impact of post merger on nigerian banks profitability
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Empirical Analysis of the Impact of Post-Merger on Nigerian
Banks Profitability
Odetayo T.A
Accountancy Department, Osun State Polytechnic, Iree
E-Mail: deentao@yahoo.com
Sajuyigbe A.S
Business Administration and Management Department, Osun State Poltechnic, Iree
E-Mail: sajuyigbeademola@yahoo.com
Olowe S.O
Department of Accountancy, Osun State College of Technology, Esa-Oke
Abstract
This research work examined the impact of post-merge on Nigerian banks profitability with special reference to
selected banks. The data used for this study was obtained mainly from secondary data which were derived from
the annual report and accounts of Access Bank and United Bank for Africa (UBA) between 2005 – 2012, Central
Bank of Nigeria (CBN) statistics bulletins and relevant journals. Access bank and United Bank for Africa (UBA)
Plc were selected for the study. The method of analysis is that of multiple regressions and the method of
estimation is Ordinary Least Squares (OLS) with aid of STATA software. The result showed that post-merger
has not significantly impacted on banks profitability. The study recommends among other that Central Bank of
Nigeria should ensure that only strong banks are merging so as to form mega bank in order to achieve the
synergy that the bank consolidation promises. And also management of Nigerian banks should be discouraged
from unethical banking practices
Keywords: Merger and acquisition, Net asset, Shareholder fund, Profitability and Bank
INTRODUCTION
Business organizations are recently seeing merger and acquisitions as an alternative means of recapitalizing. The
current trend of compelling all commercial banks to raise their capital base from N2 billion to N25 billion naira
on or before 31st December 2005 has sent some of these banks on the move to consider merger and acquisition as
a survival strategy. The process of merger and acquisitions (M&As) has been argued to enhance bank efficiency
through cost reduction revenue in the long run. It also reduces industry’s risk by elimination of weak banks and
acquiring of the smaller ones by the bigger and stronger banks as well as creates opportunities for greater
diversification and financial intermediation. As Nigerian Banks face further deregulation, increasing
competition, and continuously evolving customer demand and expectations, they have to adopt proactive
approaches in order to guarantee improve performance. There has been global phenomenon increase in M&As
implementation across all types of firms competing in every imaginable industry in the past decades (Awolusi,
2012). Afolabi, (2011) asserted that the ongoing banking reforms was built primarily on four cardinal principles
including enhancement of the quality of banks; establishment of financial stability; creating a healthy financial
sector evolution and ensuring that the financial sector contributes to real economy. Banks are not only now
mandated to put in place mechanism to identify, measure, monitor and control risks; they are expected to report
such mechanism for review of the shareholders, giving the majority of shareholders opportunity to assess the
operational structures of their company rather than the extractive figures alone.
Nigeria Deposit Insurance Corporation (NDIC) discovered that the total assets of the banking industry grew by
17.72 percent to N21.9 trillion in 2011 from N18.66 trillion in 2010 and this improved performance of the banks
was attributed to the adoption of Mergers and Acquisition (M&As) strategy by some banks. Similarly, the banks’
asset adequate ratio significantly improved as the non-performing loans to total loans ratio declined from 15.04
percent in 2010 to 5.82 percent in 2011. While the equity capital decreased by about 11.81 percent from N249.71
billion in December 2010 to N220.21 billion in 2011, the reserves increased substantially to N2,266 billion in
2011 from N179.89 billion in 2010. The adjusted shareholders’ funds increased to N1.93 trillion in 2011 from
N312.36 billion in 2010.
Consequently, the capital adequacy ratio (CAR) of the deposit money banks (DMB) improved from 4.06 percent
in December 2010 to 17.71 percent in December 2011.
It is on the premises that this research paper wishes to examine the impact of merger and acquisitions on
Nigerian Banks performance with special reference to Access bank and United Bank for Africa (UBA).
LETERATURE REVIEW
Merger and acquisitions has become global phenomenon in which many organizations employed to grow
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internally, by expanding its operations both globally and domestically. Nigerian banks were not left over to meet
required capital base as being specified by Central Bank of Nigeria (CBN) and to improve banks’ performance.
Merger is different from acquisition. Merger is the combination of two businesses that leads toward a new
business, but acquisition is the takeover or purchase of one business by other business. Merger is also helpful for
businesses in terms of solvency. Brockington (1987) defines a merger as the result of a process whereby two or
more previously autonomous concerns come under common control. According to Afolabi, (2011) merger can
be defined as a transaction where one entity is combined with another so that one initial entity loses its distinct
identity, an acquisition is classified as a transaction where one firm purchases a controlling stake (and/or the
whole) of another firm. The terms mergers and acquisition shall be used interchangeably to refer to transactions
involving the combination of at least two independent firms to form one.
Samuelson (1980) introduced what he refers to as conglomerate mergers to include situations where a company
in one industry takes on a company in another unrelated industry.
Merger and acquisition activity results in overall benefits to shareholders when the consolidated postmerger firm is more valuable than the simple sum of the two separate pre-merger firms. In line with this, Enyi
(2007) concluded that the banks consolidation exercise of 2005 as supervised by the Central Bank of Nigeria has
yielded basket full of benefits in terms of improved banking environment and renewed customer confidence in
the banking industry. Soludo (2004) opined that mergers and acquisitions are aimed at achieving cost efficiency
through economies of scale, and to diversity and expand on the range of business activities for improved
performance. Merger and acquisition is adopted to attain the operating and financial efficiencies. According to
the efficiency theory, the main motive of mergers and acquisition is to gain operating and financial synergy
(Sufian, Fadzlan, Abdul, Muhamed, Haron, & Razali, 2007)
Empirical studies on the relationship between mergers and acquisitions and banks performance.
The previous studies on the relationship between banks mergers and acquisitions and banks performance
provided mixed evidence and many failed to show a clear relationship between mergers and acquisitions and
performance. Many researchers ( Joshua, 2010; Olagunju and Obademi,2012, Elumide, 2010; Onikoyi, 2010 and
Omah, Okolie and Durowju, 2013; Cabral et al. 2002; Carletti et al. 2002)agreed that banking organizations
significantly improved their profit efficiency ranking after mergers and they agreed that mergers and
acquisitions has helped Nigerian banks to wax stronger. The studies of Carletti et al. (2002) and Szapary (2001)
provided the foundation for a research on the linkage between banks mergers and acquisitions and profitability.
Joshua, (2010) discovered that the post- merger and acquisitions period was more financially efficient than the
pre-merger and acquisitions period. Olagunju and Obademi, (2012) also found that there is significant
relationship between pre and post mergers and acquisitions capital base of commercial banks and level of
profitability. Walter and Uche (2005) posited that mergers and acquisitions made Nigerian banks more efficient.
They used descriptive stastical tools like simple percentage to present their data analysis. Elumide, (2010) also
agreed that mergers and acquisitions had improved competitiveness and efficiency of the borrowing and lending
operations of Nigeria banking industry. Evidence as provided by Caprion (1993) Calomiris and Karenski
(1996), and De-Nicolo (2003) suggested that mergers and acquisitions in the financial system could impact
positively on the efficiency of most banks. Akpan (2007), using chi square to test his stated hypothesis found
that the policy of consolidation and capitalization has ensured customers’ confidence in the Nigerian banking
industry in term of high profit.
However, Owolabi and Ogunlalu, (2013) have contrary view, they discovered that it is not all the time
that consolidation transforms into good financial performance of bank and it is not only capital that makes for
good performance of banks. DeLong and Deyoung, (2007) and Amel et al., (2004) also found that mergers and
acquisitions have not had a positive influence on banks performance in term of efficiency. While Beitel et al.
(2003) found no gain effect due to mergers and acquisitions in banking industry.
Reasons for Accelerating Pace of M & A
According to Afolabi, (2011) mergers and acquisitions among financial institutions are occurring at a rapid pace
in the US, Europe, Japan and emerging economies of the former Eastern Europe and Far East Asian countries.
For instance, Berger et al (1998) found that between 80s and 90s, there were about 3,600 mergers in the US. In
1996, the Bank for International Settlements (BIS) reported a similar trend in Japan and across Europe,
especially during the 1990s. He identified many reasons for increasing pace of M & A in Nigeria as follows:
Cost Savings
Mergers and acquisitions can lead to reductions in costs for a variety of reasons as the emerging large banks are
expected to enjoy both scale and scope economies on the one hand, and avoid cost duplication, on the other
hand.
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Revenue Enhancement
M & A can lead to increased revenues through its effects on firm size, firm scope (through either product or
geographic diversification), or market power. Research suggests that mergers may provide some opportunities
for revenue enhancement either from efficiency gains or from increased market power.
Improvement in Information and Telecommunication Technology (ICT)
New technological developments have encouraged M & A because of their high fixed costs and the need to
spread these costs across a large customer base. At the same time, dramatic improvements in the speed and
quality of communications and information processing
have made it possible for financial service providers to offer a broader array of products and services to larger
numbers of clients over wider geographic areas than had been feasible in the past.
Deregulation
Over the past 25 years, many governments have removed important legal and regulatory barriers to financial
industry development. The removal of these barriers has opened the way for increased M&As, both within and
across national boundaries and both within and across financial industry segments.
Shareholders’ Pressure
Increased competition has helped to squeeze profit margins, resulting in shareholders’ pressure to improve
performance. M & A has in many cases, seemed an attractive way to accomplish this objective.
Common Currency
The adoption of common currency by an economic block, such as euro in the European Union, has induced
changes in financial markets in the region and this has provided new opportunities for realizing economies of
scale and revenue enhancement through M & A.
ISSUES AND CHALLENGES IN M & A
Afolabi (2011) noted the first experience of M & A in Nigeria took place during the banking consolidation
programme of 2004/2005. The recent M & A transactions for 4 of the intervened banks were largely driven by
the need to address their deficient capital positions. The ransactions were largely assisted by the Regulatory
Authorities through the provision of technical support in the form of advice. While the development is expected
to resolve the problems of the intervened
banks, there are obvious issues and challenges that should be addressed both by the Regulatory Authorities and
operators in order to derive maximum benefits from the outcome of the transactions. Some of these issues and
challenges are highlighted below.
Payments System Efficiency
As M & A has the direct effect of positively affecting the payments system by improving scale efficiencies in
bank office payments operations as larger processing sites may yield scale efficiencies in processing payments
information/instruments. It is however, worthy of note to indicate that since all the affected banks are products of
M & A of the recent consolidation programme, they will bring their experience to bear in this regard. The
Regulatory Authorities should, however, pay close attention to the integration process with a view to quickly
detecting problems when they occur and proffering remedies to address such problems.
Distress Resolution
M & A transactions are usually encouraged as they serve as an efficient way of resolving problems of financial
distress. Institutions that are troubled because of their own inefficiency or under - performing investments are
often taken over as an efficient alternative to bankruptcy or other means of exit. However, there is possibility
that the depth of distress of the weaker bank may adversely affect the soundness of the healthier one remains an
issue of concern to the Regulatory Authorities. The comfort in this regard is that the exact depth of distress in all
the affected weak banks was unearthed by the Management teams of the respective banking institutions that
were appointed by the Regulatory Authorities and the financial advisers.
Range of Product Lines Available to Consumers
Successful M & A transactions should potentially be in the public interest, particularly in the area of service
delivery as the outcome is expected to add some depth to the local banking sector and make a worthwhile
contribution to banking services and the banking industry in a particular country. However, the M&A can have
implications for the prices, products and quality of services in the banking sector. In addition, the reduction in
the level of competition, which is a direct result of M & A, implies that there may be less need for innovation,
with possible less research and development spending and, which might adversely affect potentials for future
growth and development at desirable rates.
Staff Rationalization
In a service industry such as banking, motivation of staff is a key factor in ensuring that efficiency is maintained.
When banks merge, there is the tendency that jobs might be lost as part of the repositioning strategies the new
management may want to undertake. Apart from the adverse impact on employment level, the development
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could also impact negatively on the morale of the remaining workforce. This development should be envisaged,
at least in the short-run, hence appropriate strategies must be put in place by the new managements of the
emerging banks to boost the morale of staff. The adverse effects on employment is, however, expected to wane
with time as a stronger banking sector would inevitably recruit more staff when the respective banks grow and
open new branches. In addition, the induced employment generation from the real sector of the economy might
more than compensate for job loss, net of attrition, after a successful M & A.
Executive Capacity
Management of banks should be fit and proper, competent, adequately skilled and prudent. The ability of
executive management to build and mould a management team that is able to lead the
emerging banking entity after M & A through the painful process of merging IT systems, business lines and
products, cultures and people is of critical importance. In that regard, the management of the emerging entity
needs to have the ability to identify the integration
Risks at an early stage and manage them effectively in the shortest possible time.
The list of Nigerian banks
1. Access bank – Acquired intercontinental bank
2. Citibank
3. Diamond bank
4. Eco bank Nigeria limited – Acquired Oceanic bank
5. Enterprise bank limited – Formerly Spring bank
6. Fidelity bank
7. First bank of Nigeria
8. First city monument bank
9. Guaranty Trust bank
10. Heritage bank – Formerly society general bank
11. Keystone bank – Formerly PHB bank
12. Mainstreet bank – Formerly Afribank Plc
13. Skye bank
14. Stanbic IBTC bank Nigeria Ltd;
15. Standard Chartered bank
16. Sterling bank – Acquired Equitorial Trust bank
17. Union bank Plc
18. United bank for Africa Plc
19. Unity bank
20. Wema bank
21. Zenith bank
Source: www.wikipedia.org
METHODOLOGY
The data used for this study was obtained mainly from secondary data which were derived from the annual
report and accounts of Access Bank and United Bank for Africa (UBA) between 2005 – 2012, Central Bank of
Nigeria (CBN) statistics bulletins and relevant journals. Access bank and United bank for Africa (UBA) Plc were
selected for the study. The method of analysis is that of multiple regressions and the method of estimation is
Ordinary Least Squares (OLS) with aid of STATA software. The findings of this study are used as means of
generalization for the Nigerian Banking Industry.
Model Specification
The economic model used in the study: Bank performance=f(merger and acquisitions)
Bank performance is measured by the net profit (NP) while merger and acquisitions is measured by net assets
(NA) and shareholder funds (SF). Thus, this led to formulation of this model which representing a measure of
Bank Performance. i.e
NP = f(NA, SF)
lgNP = β0 + β1 lgNA+ lgβ2 SF+ Ui
where;
the a priori expectation is β1, β2 >0
lgNP = Net Profit
lgNA = Net Assets
lgSF = Shareholders Funds
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U = Disturbance Term
β = Intercept
β1- β2 = Coefficient of the independent variables.
Note: All variables are in their natural logarithm form.
DATA ANALYSIS AND INTERPRITATION OF RESULT
Table 1: Multiple regression analysis table showing net asset and shareholder funds and net profit of
Access bank
Variable
Net Asset
Shareholder funds
-cons
Coefficient
8.447
-7.532
-1.457
t
0.410
-0.370
-0.160
probability
0.695
0.729
0.883
R2 = 0.453
Adj. R2 = 0.235
F (2, 4) = 2.080
Pro > F = 0.220
The result in table 1 shows that net asset has positive impact on profitability but not significant with (β = 8.447;
t = 0.410; P ns). This implies that the higher the net asset the higher the profit. Shareholder funds has negative
impact on profitability but not significant with (β = -7.532; t = - 0.370; P ns). This implies that the higher the
shareholder funds, the lower the earnings. Both predictor variables (net asset and shareholder funds) were joint
predictors of profit (earnings) with ( F(2, 4) = 2.080; R2 =0.453; P ns). The predictor variables jointly explained
45.3% of profit, while remaining 54.7% could be due to extraneous variables.
Multiple regression analysis table showing net asset and shareholder funds and net profit of United Bank
for Africa PLC
Variable
Net Asset
Shareholder funds
-cons
Coefficient
0.492
-0.563
10.045
t
0.38
-0.220
0.580
probability
0.722
0.840
0.593
R2 = 0.079
Adj. R2 = -0.380
F (2, 4) = 0.170
Pro > F = 0.847
The result in table 1 shows that net asset has positive impact on profitability but not significant with (β = 0.4927;
t = 0.380; P ns). This implies that the higher the net asset the higher the profit. Shareholder funds has negative
impact on profitability but not significant with (β = -0.563; t = - 0.220; P ns). This implies that the higher the
shareholder funds, the lower the earnings. Both predictor variables (net asset and shareholder funds) were joint
predictors of profit (earnings) ( F(2, 4) = 0.170; R2 =0.079; P ns). The predictor variables jointly explained 7.9%
of profit, while remaining 92.1% could be due to extraneous variables.
Discussion of findings
The results of both selected banks show that (net asset and shareholder funds) were jointly predictors of
profitability in term of earnings of both banks with ( F(2, 4) = 2.080; R2 =0.453; P ns) and (F(2, 4) = 0.170; R2
=0.079; P ns) respectively. This indicate that post- merger and acquisitions of these banks their total net asset
and shareholder funds contribute to net profit but not significant. Net asset in both selected banks has positive
impact on profitability but insignificant with (β = 8.447; t = 0.410; P ns) and (β = 0.4927; t = 0.380; P ns)
respectively. While shareholder funds has negative impact on profitability with (β = -7.532; t = - 0.370; P ns) and
(β = -0.563; t = - 0.220; P ns) respectively. The finding implies that post- merger has not impacted significantly
on Nigerian banks’ profitability. This may be as a result of high liabilities of moribund acquired banks in which
consolidation could increase banks’ propensity toward risk taking through increases in leverage and off balance
sheet operations. This indicates that marginally capitalized banks acquired or merged with moribund banks.
The finding of this research work has contrary view to many studies ( Joshua, 2010; Olagunju and
Obademi,2012, Elumide, 2010; Onikoyi, 2010 and Omah et al, 2013; Cabral et al. 2002; Carletti et al. 2002)
who agreed that post- merger has significantly improved banks’ profit.
Whereas the finding is in line with Owolabi and Ogunlalu, (2013) who discovered that it is not all the time that
consolidation transforms into good financial performance of bank. The research findings of DeLong and
Deyoung, (2007); Amel et al., (2004) and Beitel et al. (2003) also conform to this finding, they found that
mergers and acquisitions have not had a positive influence on banks’ performance in term of efficiency. They
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concluded that merger and acquisitions have no gain effect on banking industry.
Conclusion and Recommendations
This research work examined the impact of post –merger on Nigerian banks; profitability with special reference
to Access bank and United bank for Africa (UBA) plc. To achieve this, a model was formulated which related to
merger and acquisitions to profitability. The result showed that post-merger has not significantly impacted on
banks’ profitability. The study conforms to the positions of Owolabi and Ogunlalu, (2013); DeLong and
Deyoung, (2007); Amel et al., (2004) and Beitel et al. (2003) that merger and acquisitions have no gain effect on
banking industry.
In order to avert negative consequences of the banks consolidation exercise in Nigeria and to realize the benefits
derivable from the exercise, it is pertinent for the CBN to make it clear that none of the banks existing today is
“too big to fail” (Aburime, 2008 as cited in Owolabi and Ogunlalu, 2013). It is therefore recommend that Central
Bank of Nigeria should ensure that only strong banks are merge so as to form mega bank in order to achieve the
synergy that the bank consolidation promises. And also management of Nigerian banks should be discouraged
from unethical banking practices and regulatory authorities should use their searchlights on the Nigerian banking
industry in order to curb financial crimes being perpetuated in Nigerian banks.
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Appendix
Access Bank Plc extracted financial efficiency parameters (2005 to 2012).
Shareholders Fund( N’000)
Year
Net Assets (N’000)
14071924
2005
14071924
28893886
28893886
2006
28384891
28900699
2007
172002026
171002026
2008
173151023
186654031
2009
182504314
182504814
2010
187037078
187037078
2011
237624211
237624211
2012
Net Profit(N’000)
501515
737149
6083439
16054464
22885794
880752
5248866
36353643
United Bank for Africa (UBA) Plc extracted financial efficiency parameters (2005 to 2012).
Net Profit(N’000)
Year
Net Assets (N’000)
Shareholders Fund( N’000)
1205
19188
3334
2005
11468
2006
47621
47317
2007
224821
168078
21441
2008
195281
195281
40825
186829
195281
40825
2009
179426
598
2010
153025
2011
150940
170033
-9647
220317
54766
2012
192467
97
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