Impact of Acquisitions on Banks Performance in Nigeria
This presentation discusses the impact of acquisitions on the performance of banks in Nigeria, focusing on reasons behind successful banks' failure. It explores the objectives, modes, and hypotheses related to bank restructuring and acquisition.
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Presentation Transcript
Impact of Acquisitions on Banks Impact of Acquisitions on Banks Performance in Nigeria Performance in Nigeria Presenter Dr Joseph Falaye @ Industry, Innovation and Infrastructure (SDGs-9)
Introduction Introduction Resource curse thesis / finance led growth Nigerian banking sector reforms Godman Sachs 20/2025 The year 2020/2025 Global financial reforms 2
The Concept The Concept Acquisition / Restructuring
Why restructure? Why restructure? Market share/position Market dominance/monopolistic tendencies Economies of scale Technology consumption Profit optimization
Modes of restructuring Modes of restructuring Amalgamation / Re-investing returns a. Merger 1b. Takeover 2b. Acquisition
Statement of the problem Statement of the problem What are the reasons behind restructured prosperous banks failure?
General General objectives of study objectives of study To find if acquisitions yield positively on profitability To find if acquisitions yield positively on efficiency
Specific Specific objectives of study objectives of study To find the short run after effects of acquisitions on profitability and efficiency of banks To find if acquisitions yield long run impacts on profitability and efficiency of banks
Hypotheses Hypotheses HO1 No association between acquisition and profitability HO2 No correlation between acquisition and efficiency HO3 No relationship between efficiency and profitability
Research questions Research questions What are the reasons behind banks failure? Does profitability purport operational efficiency in banks? Is there any relationship between efficiency and profitability in banks? Are there some hidden pits that sink banks that are profitable and efficient? Does acquisition improve banks efficiency?
Relevant theories Relevant theories Neo-classical economists theory Tobin theory of integration Hubris theory
Empirical evidence Empirical evidence Manwani and Ahmed (2018) use accounting ratios deduced from 11 years financial statements of a bank in Pakistan, the study concludes that amalgamation could not improve the financial performance of the bank.
Hassan and Giouvris (2019), Ishwarya (2019), Akinbuli and Kelilume (2013) and Tamragundi and Devarajappa (2016) are of the view that amalgamation could prove detrimental to efficiency and profitability if not well managed.
Joash and Njangiru (2015), Maraes and Gartner (2019) and Boloupremo and Ogege (2019) among several other studies opine that amalgamations of banks do raise owners value.
Methodology Methodology Secondary data Primary data
Data Analysis Data Analysis T-test Correlation analysis Profitability ratios Efficiency ratios
Conclusion Conclusion This study would benefit Bank owners / investors Bank directors Entrepreneurs businessmen, Consultants The banking sector of nations Business economy of nations It contributes to literature and serves as a good base for further research on best approaches to grow less developed economies using finance-led growth approach
The End The End
Questions and contributions? Questions and contributions?
