Financial Performance of Pakistani Banks: Pre and Post Analysis of Mergers and Acquisitions

Abstract

The study focused on the financial performance of the banks before and after the phenomenon of mergers and acquisitions in Pakistan during 2002 to 2012. Four accounting parameters including net profit margin (NPM), return on equity (ROE), return on assets (ROA), and earnings per share (EPS) are taken into consideration. Our analysis indicates that most of the banks demonstrated decline in NPM, ROE, ROA and EPS, whereas a few observed a little increase in return on Equity following the phenomenon of Merger and acquisitions. Further, the results show that the transactions occurred during the financial crises (2007-2009) mostly resulted in a decline in the financial performance of the acquired Banks.