The Impact of Mergers and Acquisition of Commercial Banks In Pakistan

Abstract

This research focuses on the impact of mergers and acquisitions of commercial banks in Pakistan. Mergers and Acquisitions (M&A) is a process in which the whole financial structure or one part of the business is changed. This is due to various factors like synergy, economies of scale, market share, competition is limited, diversification etc. even though it has benefited but history has seen many failures of mergers. Unsuccessful mergers can be of much reason. The research is based on the literature available on the secondary research. The report followed case studies of mergers between which were successful FAYSAL BANK and RBS and which went wrong between STANDARD CHARTERED and UNION BANK to learn about the various reasons why mergers turn out to be successful and unsuccessful. I also conducted primary research where I surveyed respondents who were employees of companies which had recently undergone mergers or acquisition. This gave me important insights about what the employees reactions are how they perceive this act. I have also done an interview with one of the manager of Faysal bank. This thesis report consists of five chapters. This problem statement is Do mergers and acquisition have a positive impact on the banking sector of Pakistan? What are the benefits and disadvantages of mergers and acquisitions? Chapter 1 gives us an introduction about mergers and acquisitions. Its pros and cons, present status. Chapter 2 tells us about the research design and methods and methods used for research. Chapter 3 has foreign and local reviews relating to the topic. It also covers a case study of the two banks that have undergone mergers and acquisition recently. It also tells us about employees’ reactions and how management can retain the best and experience employees. Chapter 4 contains the analysis of the questionnaire and finally chapter five gives us the summary of the findings.