THE IMPACT OF MERGERS AND ACQUISITIONS ON BANKS IN NIGERIA

THE IMPACT OF MERGERS AND ACQUISITIONS ON BANKS IN NIGERIA

ABSTRACT

Mergers and Acquisitions is the current trend that is spreading throughout the world.  The various financial sector reforms of the past two decades in Nigeria brought about some changes in terms of the number of institutions, ownership structure, as well as depth and breadth of the market.  The recent reform (2005) prompted regulatory induced restructuring and engendered the alignment of banks to ensure a sound, responsive, competitive and transparent banking system suited to the demands of the Nigerian economy and the challenges of globalization. The study was set out to examine the effect of Mergers. and Acquisitions on banking fundamental indices using CAMELS analysis. To test the impact of mergers and acquisitions on banks in Nigeria, we used the annual reports of five banks namely Zenith Bank Plc, UBA Plc, Oceanic Bank Plc, Afribank Plc and Access Bank Plc from 2001 to 2007. Furthermore, it was seen that the CAMEL positions on banks has greatly improved due to the positive effect of mergers and acquisitions.  There exist vast potential for cross border merger within the West African sub-region.