Abstract
This research is to test the impact of mergers and acquisitions (M&A) on the financial performance
of banks in the long run period on the acquiring firm in comparison to the Industry. The research
uses the long-term post-merger published data by state bank of Pakistan (SBP) of the selected
banks and the industry to investigate the long-term performance. It compares performance of the
acquiring firms and the industry. The present work conducts a comprehensive ratio analysis of 25
major ratios related to Capital Adequacy, Asset Quality, Management Soundness, Efficiency and
Liquidity. Three banks are selected for this study and analyzed for the post-merger profitability
the banks are Bank Islami, Bank Albarakah and the Faysal bank limited. Twenty-five ratios for
each bank individually and the average of these three banks were compared to the industry
averages. For the purpose of the ratio analysis paired sample T tests were applied with the help of
SPSS. At the end the researcher found that the merged bank has ratios significantly different from
the industry averages. It is concluded that in long run the performance of the merged banks in
Pakistan is significantly different from the industry averages. As we look at the ratios of Faysal
Banks twenty-one out of twenty-five, Bank Islami fourteen out of twenty-five, Bank Albarakah
sixteen out of twenty-five and if we look at the banks average Nineteen out of twenty-five are
significantly different from the post-merger industry ratios.
Muhammad Raghib Zafar, Dr. Abdul Sattar Shah. (2020) Long Run Financial Performance Analysis of Pakistani Banks After Merger and Acquisition in comparison with whole Banking Industry, KASBIT Business Journal, Volume-13, Issue-2.
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