TITLE:
Effects of Mergers and Acquisitions on the Financial Performance of Commercial Banks in Developing Countries—A Case of Zambia
AUTHORS:
Mwaanga Haakantu, Jackson Phiri
KEYWORDS:
Mergers and Acquisitions, Commercial Banks, Financial Performance, Financial Ratios
JOURNAL NAME:
Open Journal of Business and Management,
Vol.10 No.6,
November
11,
2022
ABSTRACT: Mergers and
acquisitions are one of the most famous inorganic investment strategies used to grow and expand business operations
across the world. However, studies show that the effects of mergers and
acquisitions on the financial performance of commercial banks are inconsistent.
Although many studies have been conducted on mergers and acquisitions
worldwide, in Zambia more studies need to be conducted because little
information on the effects of mergers and acquisitions on the financial
performance of commercial banks is known. The
study aimed to assess the effects of mergers and acquisitions on the financial
performance of commercial banks in Zambia. Descriptive statistics and
paired sample t-tests were used for the 2 years before and after merger and
acquisition for the collected secondary data for mergers and acquisitions that
occurred between 2009 to 2019. Finance Bank Zambia, BancABC Zambia and Atlasmara Zambia were selected using convenient sampling. The
indicators of financial performance showed mixed results after the study. The liquidity and profitability ratios that were
analyzed showed that there was no significant improvement in the financial performance
of the business. The efficiency ratio showed improvement with a p-value of
0.014 while the leverage ratios showed mixed results. The study will fill the
information gap and help investors, shareholders and bank managers inter alia
in making critical decisions on mergers and acquisitions as a long-term
business strategy.