A CASE STUDY OF MERGER OF BENARAS STATE BANK LTD. (BSB) WITH BANK OF BARODA (BOB)

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A CASE STUDY OF MERGER OF BENARAS STATE BANK LTD. (BSB) WITH BANK OF BARODA (BOB)

Journal Title: Asian Journal of Management Sciences and Education - Year 2014, Vol 3, Issue 1

Abstract

Dis-intermediation and competition have forced banks to look for new ways to boost their returns. One of the routes adopted by banks is that of consolidation. Mergers and acquisitions have been used to expand revenues and cut costs. Consolidation of banks through Mergers and Acquisitions is not a new phenomenon for the Indian banking system. It has been going on from the early days of modern banking when three Presidency banks merged in to form of the Imperial Bank of India in 1921. The study has been undertaken to make a comparison of the performance of BSB and BOB prior and after the merger on the basis of various financial ratios. All efforts are towards judging whether merger of banks have been fruitful or not and benefit of synergies has been obtained or not. For the purpose of analysis ratio of four years prior to merger and four years after merger have been compared. The analysis of financial ratios shows that efficiency has increased after the merger of BOB and BSB. Improvement has been observed after merger in total income to total capital ratio, interest income to interest expenditure ratio, net profit to total capital ratio, advances to deposits ratio and advances to total assets ratio. Poor performance has been observed in the case of deposits to total assets ratio, deposits to investments ratio, fixed asset to total assets, total income to total assets ratio and net profit to total assets ratio.

Authors and Affiliations

Brajesh Tiwari

Keywords

merger acquisition capital deposits Investments advances net profit and total assets total income

EP ID EP141702
DOI -
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