Responding to Opportunities and Challenges Through Mergers and Acquisitions: Evidence from Four Indian Banks

-- Abhay Raja

Banking sector has turned more dynamic over the years. New horizons are opening up and new challenges are also shaping up. In this scenario, banks are attempting to grab many opportunities and are responding to several challenges through their strategic moves of mergers and acquisitions. This study aims to analyze the effectiveness of mergers and acquisitions in the Indian banks. The study has taken four prominent amalgamations of banking sector in the last decade as samples. The analysis was done by taking five years each before and after the amalgamation. The effectiveness of amalgamations was analyzed by considering profitability, liquidity and solvency ratios of the banks. The analytical computations were performed through SPSS. It was observed that amalgamations do not enhance the companies’ profitability significantly. On the other hand, it helps banking companies to escalate their liquidity position and the ability to repay debt.

© 2016 IUP. All Rights Reserved.

Post-Mergers and Acquisitions Performance of Select Indian Banks

-- I Babu Rathinam and P S Sridharan

The present paper examines the impact of Mergers and Acquisitions (M&As) on the financial efficiency of selected banks in India. The post-M&A performance is measured using the ratio analysis. The main focus is on the overall profitability parameters, liquidity parameters, solvency parameters and overall efficiency parameters. We found significant change in the earnings of the shareholders; a little change in liquidity position; significant change in the long-term solvency position of the firms; and significant change in the overall efficiency of the banks during the post-merger period 2008-2013. The results of the study indicate that M&As in India have significant impact on the financial performance of banks and that the acquiring firms were able to generate value.

© 2016 IUP. All Rights Reserved.

E-Banking Services in India: A Broad-Brush Survey of Indian Banks

-- Vikas Chauhan and Vipin Choudhary

In this era of Internet and advanced information and communication technology, it is very important for banking industry to introduce innovative electronic banking delivery channels and services. This study attempts to present a comprehensive view of the current status of e-banking in India and analyze the growth and trends of electronic channels of banking service delivery. In addition, the study does a comparative analysis of public and private sector banks. The study is mainly based on two-fold analysis: the first part analyzes online/PC banking through Diniz model of website survey, and the second part analyzes other e-banking delivery channels based on secondary data compiled from Reserve Bank of India website. The analyses revealed that e-banking is becoming massively popular in India and has led to huge competition among banks. Indian banks are showing higher growth and trends in terms of electronic banking delivery channels, and both public and private sector banks provide e-banking services competitively, but the main competition exists between the SBI Group and new private sector banks.

© 2016 IUP. All Rights Reserved.

Efficiency and Profitability of Public and Private Sector Banks in India: Data Envelopment Analysis Approach

-- Ravi Inder Singh and Simran Kaur

This paper examines the inter-bank relative efficiency of public and private sector commercial banks in India. This study includes analysis of slacks which remain to be explored for getting a clear picture about the causes of inefficiency. Though the issue is important, no recent study, to the best of our knowledge, has addressed it. Data Envelopment Analysis (DEA) approach has been used to examine the efficiency level achieved and to identify the slacks. The results reveal that private (Indian) sector banks are relatively more efficient compared to public sector banks. It was found that State Bank of Hyderabad, Bank of Maharashtra, Central Bank of India, United Bank of India, Dhanlaxmi Bank and ING Vysya could not achieve 100% efficiency even in a single year, whereas the Federal Bank, HDFC Bank, Kotak Mahindra Bank, Nainital Bank and Yes Bank Ltd., all private sector banks, achieved full efficiency in all the ten years. The strategies suggested in this study to the comparatively less efficient banks would help them not only in improving their efficiency, but also in lowering the cost of their products for the overall benefit of their customers. Efficiency is also found to be directly affecting the profitability of banks.

© 2016 IUP. All Rights Reserved.