The Impact of Merger and Acquisition in Banking Industry and the Economy

Ibo Adekoya, Oyewole Samuel, Akindutire O, Oluwadare Abraham

Abstract


Merger and acquisition is the only legal mode for the banking consolidation as part of the economic reform.  For banks to be active player in the economy it requires adequate capital and this can be sourced through merger and acquisition. More often than not, since merger and acquisition is a vital instrument for banks recapitalization and efficiency, there is need for researchers to find out its impact both negative and positive in the banks and the economy at large.  In carrying out this research, Diamond Bank of Nigeria, Ondo branch was used as the case study where questionnaire were distributed as the primary source of data and information were collected through secondary source.  An overview of merger and acquisition exercise between the years 2005-2015 was done in order to know those banks that have existed in Nigeria before and after the years under review.  After a thorough distribution of questionnaires and analysis of the information gotten, a conclusion was drawn that merger and acquisition has a great impact in banking industry & the economy at large, also an instrument of revitalizing and boosting of banks capital base so as to guarantee its active role in the economy.  Recommendations were also made to relevant stake holders to make adequate preparation for the purpose of tackling any negative effect that might suffice after the exercise.


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