Impact of Merger and Acquisition on the Profitability of Banks in Pakistan

Abstract

Pakistan has straightly effected from the worldwide financial crisis and because of which the economy of Pakistan highly went down in these decades. As a result, many industries shut down in Pakistan and a lot of others merged and acquired by other companies and banks. Therefore, the main aim of this study is to determine the effect of merger and acquisition on bank’s profitability, for which the financial analysis of eights banks which merged and acquired between 2007 to 2015 were examined through simple descriptive statistics. The data for the current study has collected twice., i.e. before and after merger and acquisition. A comparative study has been conducted to evaluate the profitability of banks before and after the merger and acquisition and also at event quarter. Results of study showed that all the three hypotheses have been accepted. The results demonstrated the major effects of merger and acquisition on the profitability of eight Pakistani banks. Also, some of changes occurred in the financial ratios after mergers. Managerial implications so as are provided built on the results of the study. Similarly, suggestions and limitations and other information related to this study is also presented in the thesis for further research.