The effect of mergers and acquisitions on the financial performance of commercial banks in Nepal
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Author(s)Baburam AdhikariLink to ORCID Index: https://orcid.org/0000-0003-3226-9971
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Marie KavanaghLink to ORCID Index: https://orcid.org/0000-0002-3611-243X
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Bonnie HampsonLink to ORCID Index: https://orcid.org/0000-0002-9196-4790
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DOIhttp://dx.doi.org/10.21511/bbs.18(4).2023.07
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Article InfoVolume 18 2023, Issue #4, pp. 74-84
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- 743 Views
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550 Downloads
This work is licensed under a
Creative Commons Attribution 4.0 International License
Mergers and acquisitions (M&As) have become one of the most significant tools for consolidating banks and financial institutions (BFIs) in Nepal, which has slowed the exponential growth of banks and financial institutions since the central bank of Nepal imposed a new mandatory capital requirement. This research paper examines the consolidation and restructuring effects in Nepal’s banking sector, predominately through M&As. This study answers a key question related to the M&A effect on the financial performance of commercial banks using a set of 13 financial ratios. The study used a sample of seven commercial banks that were involved in M&A transactions between 2013 and 2020, and their significant differences in financial ratios were measured by comparing financial performance data from the three years before and after the M&A using a paired t-test statistic. The financial performance of commercial banks improved significantly after the M&A, as measured by liquidity and leverage ratios. However, the ratios of profitability and shareholder wealth show either no change or a marginal change after the M&A. This finding contributed to existing research gaps in the financial performance of the banking sector before and after the M&A in the Nepalese context and has significant policy implications for commercial banks, shareholders, government, and regulatory bodies to enforce M&A policies, review their existing M&A laws, and M&A deals between banks and financial institutions to take synergy benefits in the long term.
- Keywords
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JEL Classification (Paper profile tab)G34, G21, G28, E58
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References33
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Tables4
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Figures0
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- Table 1. Variables to measure financial performance
- Table 2. Paired sample statistics of selected commercial banks
- Table 3. Paired sample t-test of commercial banks
- Table A1. Overview of banks and financial institutions
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Industrial development in Saudi Arabia: disparity in growth and development
Anis Ali
doi: http://dx.doi.org/10.21511/ppm.18(2).2020.03
Problems and Perspectives in Management Volume 18, 2020 Issue #2 pp. 23-35 Views: 3015 Downloads: 1025 TO CITE АНОТАЦІЯIndustrial development in any nation plays a vital role in the strengthening of the economy and employs human resources as per specifications and directly towards the mainstream of the nation. In Saudi Arabia, there was rapid industrialization for four decades. Some manufacturing industries performed well, while some internal and external business environment factors influenced the others’ performance. The study focuses on historical development, as well as recent trends of well-performing and poor-performing industries of Saudi Arabia. Small manufacturing industries in Saudi Arabia are underdeveloped and need more attention to attain sustainable and progressive growth rate in the form of the number of establishments to enjoy the potential. Manufacture of tobacco, computer, electronics and optics, pharmaceuticals and transport equipment are the deprived and underdeveloped industries of the manufacturing sector. There should be some easy credit schemes for the development of deprived or underdeveloped manufacturing industries. To attain sustainable growth and development of the manufacturing sector, a positive attitude of the government towards underdeveloped manufacturing industries, favorable labor laws, and entrepreneurial awareness, technical and financial assistance are necessary. The growth and development of the manufacturing sector of Saudi Arabia will be helpful in the attainment of goals of Vision 2030.
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Why banks should consider ESG risk factors in bank lending?
Sarwar Uddin Ahmed ,
Samiul Parvez Ahmed ,
Ikramul Hasan
doi: http://dx.doi.org/10.21511/bbs.13(3).2018.07
Banks and Bank Systems Volume 13, 2018 Issue #3 pp. 71-80 Views: 2821 Downloads: 1132 TO CITE АНОТАЦІЯWhy banks should be concerned about incorporating environmental, social and governance (ESG) criteria in the lending process? What is the motivation? This study aims to find the motives for considering environmental, social and governance (ESG) criteria in bank lending process. A primary survey has been conducted to know the current status and motivation for incorporating ESG factors in investment decisions. Sample comprised 30 private commercial banks (PCBs) operating in Bangladesh. Data collected were analyzed with graphs, descriptive statistics, and regression analysis. Findings of the study indicate that banks are mostly considering basic environmental, social and governance factors set by regulators qualitatively. They are lagging behind in considering the advanced ESG criteria needed for sustainable and efficient credit risk management. Based on motivation for incorporating ESG factors, it was found that banks pioneering in incorporating ESG factors in lending decisions are compensated through better financial performance. Findings of the study are expected to encourage practitioners and policy-makers to take more pragmatic steps to incorporate ESG risk factors quantitatively in lending decision-making process.
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Integrated reporting and financial performance of South African listed banks
Reon Matemane ,
Rozane Wentzel
doi: http://dx.doi.org/10.21511/bbs.14(2).2019.11
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