Abstract:
This study examines the impact of strategic acquisitions on the financial performance of banking sector, with a focus on Habib Bank Limited’s (HBL) acquisition of Barclays Pakistan in 2015. The research aims to evaluate the short-term and long-term financial effects of this transaction, considering important indicators like profitability, solvency, and stock performance. By employing a mixed-methods approach, the research integrates quantitative financial ratio analysis with qualitative data from market trends and regulatory frameworks. Findings reveal a dual effect on the financial health of HBL. Profitability measures (ROA, ROE) decreased but later recovered, signaling successful consolidation. The Capital Adequacy Ratio (CAR) increased after acquisition, enhancing stability. Stock performance, initially volatile, gradually stabilized, reflecting market confidence. Nonetheless, rising administrative expenses, regulatory sanctions, and macro-economic pressures, such as COVID-19, influenced long-term outcomes. This research highlights the key importance of meticulous post-acquisition integration and compliance with regulations for optimal synergies and shareholder value. It contributes to limited M&A literature in emerging economies such as Pakistan and suggests implications for policymakers and banking institutions. Recommendations include customer-focused credit policies, better loan monitoring, and building favorable cross-border M&A environments.
