Performance of Bank of Baroda (BOB) after Acquisition of Benaras State Bank Ltd. (BSB): A Case Study

DR.BRAJESH KUMAR TIWARI

Abstract


Dis-intermediation and competition have forced banks to look for new ways to boost their returns. One of the routes adopted by the banks is that of consolidation. Mergers and acquisitions have been used to expand revenues and cut costs. Consolidation of banks through Mergers and Acquisitions is not a new phenomenon for the Indian banking system. It has been going on from the early days of modern banking when three Presidency banks merged in to form of the Imperial Bank of India in 1921. The study has been undertaken to make a comparison of the performance of the Banaras State Bank (BSB) and Bank of Baroda (BOB) prior and after the merger on the basis of various financial ratios. All efforts are towards judging whether the merger of banks has been fruitful or not and benefit of synergies has been obtained or not. For the purpose of analysis ratio of four years prior to a merger and four years after merger have been compared. The analysis of financial ratios shows that efficiency has increased after the merger of BOB and BSB. Improvement has been observed after merger in total income to total capital ratio, interest income to interest expenditure ratio, net profit to total capital ratio, advances to deposits ratio and advances to total assets ratio. Poor performance has been observed in the case of deposits to total assets ratio, deposits to investment ratio, fixed asset to total assets, total income to total assets ratio and net profit to total assets ratio.


Keywords


Merger, Acquisition, Capital, Deposits, Investments, Advances, Fixed Assets, Interest Earned, Interest Paid, Total Income, Total Expenditure, Net Profit and Total Asset

Full Text:

PDF

Refbacks

  • There are currently no refbacks.


Creative Commons License
This work is licensed under a Creative Commons Attribution 3.0 License.

AAEF©: World Science Publisher United States