Mergers and Financial Performance of Access Bank Plc in Nigeria
DOI:
https://doi.org/10.33003/fujafr-2024.v2i3.123.118-128Keywords:
Merger, Financial Performance, Return on Assets, Return on Equity, Capital Adequacy RatioAbstract
This study examined the impact of mergers and acquisition on the financial performance of merged banks in Nigeria. Specifically, the study aimed to investigate the impact of the merger between Access bank Plc and Diamond Bank Plc on financial performance. The merger period was classified into (2016 to 2019) and (2020 to 2023). Secondary data was obtained from the annual reports of Access Bank plc for the period under review. The t-test statistic was used to determine if there is a significant difference in the financial performance of Access bank pre-merger and the post-merger. The findings revealed that there was a significant difference in the financial performance (ROE, ROA, CAR). Based on the findings, the study concludes that mergers and acquisition affect the overall performance of banks. The study therefore recommend that merger and acquisition is a strategy that banks should adopt to improve their financial performance.
References
Abba, G. O., Zachariah, P., & Inyang, E. E. (2013). Capital adequacy ratio and banking risks in the Nigeria money deposit banks. Research Journal of Finance and Accounting, 4, 17-25.
Adam, U. M., & Ayagi, S. R. (2024). Liquidity and Profitability of Listed Deposit Money Banks in Nigeria. FUDMA Journal of Accounting and Finance Research [FUJAFR], 2(2), 71–80. DOI: https://doi.org/10.33003/fujafr-2024.v2i2.60.71-80
Ahmed, M. K., John, J. W., & I. A. (2015). Effects of mergers and acquisitions on profitability and earnings per share of selected deposit money banks in Nigeria. European Journal of Business and Management, 7(27), 1-20.
Al-Sabbagh, N. M., & Magableh, A. H. (2004). Determinants of capital adequacy ratio in Jordanian banks (Doctoral dissertation).
Ayozie, D. O., & Agu, C. I. (2018). Post-merger performance of banks: A case study of Access bank plc and Diamond bank plc. International Journal of Academic Research in Accounting, Finance and Management Sciences, 8(4), 191-199.
Babajide, A. A. & Olokoyo, F. (2017). Assessment of financial stability in emerging economies: evidence from Nigeria, Contributions to Economics, in: Ümit Hacioğlu & Hasan Dinçer (ed.), Global Financial Crisis and Its Ramifications on Capital Markets, 191-207. DOI: https://doi.org/10.1007/978-3-319-47021-4_15
Badreldin, A., & Kalhoefer, C. (2009). The effect of mergers and acquisitions on bank performance in Egypt. German university in Cairo working Paper series, 18:1-15. DOI: https://doi.org/10.2139/ssrn.3749257
Basel Committee on Banking Supervision. (2019). Basel III: Finalizing post-crisis reforms. Bank for International Settlements. Retrieved from https://www.bis.org/bcbs/publ/d424.htm
Beck, T., Demirgüç-Kunt, A., & Levine, R. (2016). Bank concentration: Cross-country evidence. Journal of Financial Economics, 54(3), 319-334.
Berger, A.N., DeYoung, R., Genay, H., & Udell, G. (2000). Globalization of financial institutions: Evidence from cross-border banking performance. Brookings-Wharton Papers on Financial Services, 23-120. DOI: https://doi.org/10.1353/pfs.2000.0001
Berger, A. N., & Humphrey, D. B. (2020). Bank scale economies, mergers, concentration, and efficiency. In Handbook of Banking and Finance, Edward Elgar Publishing.
Berrospide J, & Edge R. (2008). Linkages between the financial and real sectors: Some lessons from the subprime crisis. Federal Reserve Board Working Paper.
Biodun, K. M., Zahra, U. F., Abubakar, N., Rasaq, B. A., & Jamiu, A. A. (2024). Merger, Acquisitions and Firm Value among Deposit Money Banks in Nigeria: A review of literature. FUDMA Journal of Accounting and Finance Research [FUJAFR], 2(2), 81–94. DOI: https://doi.org/10.33003/fujafr-2024.v2i2.95.81-94
Busari, I. A., & Adeniyi, A. (2017). The effects of mergers and acquisitions on the performance of Nigerian banks. International Journal of Innovative Finance and Economic Research, 5(3), 37-53.
Cardoso, O. (2023, September). Banks need higher capital to support economy – Cardoso, Punch. https://punchng.com/banks-need-higher-capital-to-support-economy-cardoso
Claessens, S., & Kodres, L. E. (2014). The Regulatory Responses to the Global Financial Crisis: Some Uncomfortable Questions. International Review of Financial Analysis, 36,47-63. DOI: https://doi.org/10.5089/9781484335970.001
Demirgüç-Kunt, A., & Levine, R. (2016). Bank concentration: Cross-country evidence. Available at http://www.globalpolicy.org/socecon/tncs/mergers
Dewatripont, M., & Tirole, J. (2021). The prudential regulation of banks. MIT Press.
Etim, O. E., & Umoffong, N, J. (2020). Mergers and Acquisition Strategy and Performance of Selected Deposit Money Banks in Nigeria. International Journal of Research and Scientific Innovation, 7(5), 141-152.
Fabinu, I. B., Jonny, M. A., & Osidero, T. (2018). An evaluation of the comparative effects of mergers acquisitions on the profitability and efficiency of banks: A case study of selected banks in Nigeria. Research Journal of Finance and Accounting, 9(7), 122-135.
Gbegi, O. D., Ibrahim, A. A., & Ibrahim, T. (2017). Post-merger and acquisition and the profitability of deposit money bank in Nigeria (A study of Zenith Bank Nigeria plc). Funai Journal of Accounting, Federal University Business and Finance, 1(1), 255-266.
Ghosh, A. (2001). Does operating performance really improve following corporate acquisitions? Journal of Corporate Finance, 7, 151–178. DOI: https://doi.org/10.1016/S0929-1199(01)00018-9
Haque, F., & Brown, K. (2018). Mergers and capital adequacy ratio in the banking sector: Evidence from Bangladesh. Journal of Financial Stability, 36(2), 172-183
Hiyam, S., & Boutheina, H. (2018). Effects of mergers and acquisition on performance of Banks. International Research Journal of Finance and Economics, 15(6), 69-72.
Hsu, P., & Chen, J. (2020). Capital adequacy and bank stability: An empirical study. Journal of Financial Regulation and Compliance, 28(1), 68-84.
Jiang, W., & Li, Y. (2022). Market power and innovation: evidence from bank mergers. Journal of Financial Economics, 145(3), 657-672.
Johnson, A., & Davis, R. (2022). Understanding Bank Profitability: ROA and ROE Metrics. Journal of Banking Research, 58(3), 214-229.
Johnson, H. J., & Houston, S. J. (2016). Financial performance effects of mergers in the US banking industry: Evidence from a decade of data. Journal of Banking & Finance, 61(4), 55-68.
Korolo, A. S., & Korolo, E. O. (2024). Human Resource Costs and Corporate Financial Performance of Listed Deposit Money Banks in Nigeria. FUDMA Journal of Accounting and Finance Research [FUJAFR], 2(2), 56–70. DOI: https://doi.org/10.33003/fujafr-2024.v2i2.93.56-70
Kroszner, R. S., & Strahan, P. E. (2020). Regulation and the rise of bank mergers: The influence of government policy on market dynamics. Review of Financial Studies, 33(6), 2350-2374.
Kumar, V., & Singh, R. (2021). The impact of capital adequacy ratios on bank performance. International Journal of Banking and Finance, 15(2), 112-126.
Miller, T. (2020). Evaluating Bank Performance: Key Ratios and Indicators. Economics and Finance Review, 12(4), 45-59.
Moh’d, A. K. A., & Obeidat S. F. (2013). Determinants of capital adequacy in commercial banks of Jordan an empirical study. International Journal of Academic research in Economics and Management Sciences, 2, 44. DOI: https://doi.org/10.6007/IJAREMS/v2-i4/53
Molyneux, P., & Thornton, J. (2015). Return on equity and mergers in the European banking sector. European Financial Management, 21(1), 135-158.
Morrison, A. D., & White, L. J. (2021). Banks and mergers: The changing landscape of financial markets. Journal of Banking & Finance, 131(2), 315-329.
Oloye, M. I., & Osuma, G. (2015). Impact of mergers and acquisition on the performance of Nigerian banks (a case study of selected banks). Pyrex Journal of Business and Finance Management Research, 1(4), 23-40. Retrieved from https://www.pyrexjournals.org/pjbfmr/pdf/2015/november/oloye-and-osuma.pdf
Salihu, A. S., Abdullahi, S. R., & Siyaka, A. R. (2023). Moderating role of inflation on how loan and debt ratios influence profitability: A study of deposit money banks quoted on Nigerian Exchange. Gusau International Journal of Management and Social Sciences, 6(1), 1-24.
Santos, J. (2022). Regulatory capital and financial stability: A comprehensive analysis. Financial Stability Review, 37(4), 201-215.
Sitepu, A. P. (2023). Analisis rasio profitabilitas dan rasio aktivitas menjadi dasar penilaian kinerja keuangan ksp karya mandiri. Juremi: Jurnal Riset Ekonomi, 3(1), 125–130. Retrieved from https://bajangjournal.com/index.php/Juremi/article/view/6090 DOI: https://doi.org/10.53625/juremi.v3i1.6090
Smith, P. A., & Walter, I. (2017). The impact of mergers on return on equity for banks in the UK. British Journal of Management, 28(2), 215-231.
Sufian, F., & Habibullah, M. S. (2019). Mergers and the change in banking performance: Evidence from Malaysia. Asia-Pacific Financial Markets, 15(3), 191-207.
Williams, B., & Nguyen, Q. T. (2017). Capital adequacy ratio in Vietnamese bank mergers. International Journal of Banking, Accounting, and Finance, 9(2), 112-128.
Yusuf, O. B., & Akinsanya, A. O. (2017). Acquisition and performance of the Nigerian banking sector. International Journal of Banking and Finance, 10(1), 45-60.
Downloads
Published
Issue
Section
License
Copyright (c) 2024 FUDMA Journal of Accounting and Finance Research [FUJAFR]
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
The FUDMA Journal of Accounting and Finance Research (FUJAFR) operates a copyright policy that ensures a balance between author rights and wide dissemination of scholarly work.
1. Author Copyright Retention
Authors retain full copyright of their published work without restriction. Submission to FUJAFR does not transfer ownership of copyright to the journal.
2. License to Publish
By submitting a manuscript and upon acceptance, authors grant FUJAFR:
- The right to publish, reproduce, and distribute the article
- The right to identify itself as the original publisher of the work
This grant is non-exclusive, meaning authors are free to reuse their work in other contexts, provided proper acknowledgment of the original publication in FUJAFR is made.
3. Licensing of Published Content
All articles are published under the:
Creative Commons Attribution-NonCommercial License (CC BY-NC 4.0)
Under this license:
- Users may share and adapt the work for non-commercial purposes only
- Proper attribution to the author(s) and the journal is required
- Any commercial use requires explicit permission from the copyright holder
4. Author Reuse Rights
Authors are permitted to:
- Archive their published articles in institutional repositories or personal websites
- Share their work for educational and research purposes
- Reuse portions of their work in future publications (e.g., books or other articles), provided proper citation of the original publication is included
5. Third-Party Content
Authors are responsible for obtaining permission to use any third-party copyrighted material (e.g., images, tables, datasets) included in their manuscripts. Proper acknowledgment must be provided where required.
6. Attribution Requirement
All users of FUJAFR content must provide appropriate credit, including:
- Author name(s)
- Article title
- Journal name (FUJAFR)
- Year of publication
