Effect of mergers and acquisitions on banks’ profitability in Nigeria Akinyomi Oladele John*, Olutoye Adedayo** *Financial Studies Department, Redeemer's University, Ogun State, Nigeria **Afe Babalola University, Ado Ekiti, Ekiti State, Nigeria Corresponding Author
Online published on 29 November, 2014. Abstract In recent times, the global economy has witnessed an increased incidence of mergers and acquisitions, particularly in the banking sector. This study examines the effect of mergers and acquisitions on the profitability of Nigerian banking sector. Data for the study were obtained from the audited annual reports of the selected banks in Nigeria. The results of the regression analysis conducted revealed that there is a significant difference between pre-mergers and acquisitions return on equity on one hand; and a significant difference between pre and post-mergers and acquisitions return on assets on the other hand. Specifically, the results of the study revealed a decline in financial performance at the post mergers and acquisitions when compared with that of the pre mergers and acquisitions dispensation. In other words, mergers and acquisitions in the Nigerian banking sector did not show any improvement in the profitability of the banks. It is recommended for banks’ management to strategize so as to enhance profitability, stability and growth. Top Keywords Mergers, Acquisitions, Profitability, Banking Sector, Nigeria. Top |