A STUDY OF BANK MERGERS IN INDIA: A CASE STUDY OF THE MERGER OF BANK OF RAJASTHAN WITH ICICI BANK

Abstract

Mergers and Acquisitions in the banking industry are buzzword these days. The present paper studies the mergers and acquisitions in the Indian Banking Industry with special reference to the merger of Bank of Rajasthan with ICICI Bank took place on May 23, 2010. The paper analyses the impact of merger on the financial performance of acquirer bank and compares the pre and post merger financial performance of the Bank with the help of financial parameters like Capital Adequacy Ratio, Debt-Equity Ratio, Net NPAs to Net Advances, Interest Income to Total Assets, Interest Expense to Total Assets, Operating Expenses to Total Assets, Credit-Deposit Ratio, Credit Deposit Ratio, Net Profit to Total Assets, Return on Assets, Return on Equity, Spread to Total Assets, Earning Per Share and Cash Deposit Ratio. Further, averages, standard deviation and t-test have been used for analyzing the data. The study concludes that there was a minor difference in the pre- and post-merger performance in relation to some ratios, but most of the ratios showed no significant difference in the pre- and post-merger analysis.