THE EFFECT OF MERGER IN THE GROWTH OF MCB BANK LIMITED

Abstract

In July 2017, MCB Bank Limited made the merger with the NIB Bank Limited and the post-merger quarter report of July to September 2017 has reported that the net profit of MCB bank was Rs 5.44 billion which was down from 18.93% compared to the last year quarter report ofsame period ofRs 6.71 billion due to the main factor of lower capital gains. MCB Bank’s capital gain was at Rs 854 million with last year's quarter gain of Rs 3.4 billion. The lower capital gain problem affected the profits of MCB Bank Limited becoming controversial because the merger would bring ' in capital gain for the bank, The required analysis is from the year of 2016 pre-merger period to the year of 2018 post-merger period to determine the loss Capital gain isjust a short-term problem or a problem for the foreseeable future for MCB Bank. The design and implementation for the report will be on the main key indicators of profits and other incomes, asset, liabilities and expenses made by the MCB Bank limited before merger in 2016 then after merger 2017 then in 2018. The problem for the MCB Bank ofloss capital gain during the year 2017 was due to the demerger ofMCB bank branches and they were sold at a low value that is why their capital gain were in loss. In Post-merger period of 2018, the financials of the MCB Banks where in a better shape as they were increase in the total assets and other income, but they were also increase in total liabilities and decrease oftotal equity and minor decrease of its profit after taxation. By doing analysis of the problem we conclude that the loss of capital gain was only for a short period oftune and it is not a long-term foreseeable problem for the Bank.