Evaluating the impact of mergers and acquisition on bank performance (A case study of First Capital Bank and Barclays Bank)

Author
Rosemary, John
Title
Evaluating the impact of mergers and acquisition on bank performance (A case study of First Capital Bank and Barclays Bank)
Abstract
This dissertation investigates the impact of mergers and acquisitions (M&A) on the performance and market valuation of First Capital Bank in Zimbabwe, a case study within a banking sector grappling with economic challenges and regulatory pressures. The research draws upon valuation theory, monopoly theory, and efficiency theory to understand the motivations and potential outcomes of M&A in this context.
The study employs a mixed-methods approach, combining financial analysis of pre- and post-merger data with a survey of bank tellers and customers to assess the impact on key performance indicators such as return on equity, return on assets, and capital adequacy ratios. The research also examines the market valuation of the merged entity to determine the perceived impact of the merger on stakeholders.
Findings reveal that M&A have been a significant strategy for banks in Zimbabwe to meet minimum capital requirements and enhance profitability. However, the research also identifies potential risks associated with M&A, including the need for careful integration and the potential for negative long-term impacts on performance.
The dissertation concludes that while M&A can be a valuable tool for survival and growth in the Zimbabwean banking sector, careful planning and execution are crucial to mitigate risks and maximize benefits. Recommendations include conducting thorough background checks, transparent public announcements, performance appraisals, monitoring teams, and a review of the capital threshold and interest rate controls. The study suggests further research on the long-term impacts of M&A on bank performance, the role of regulatory frameworks in promoting successful M&A, and the impact of M&A on financial inclusion and economic growth in Zimbabwe.
Date
JUNE 2024
Publisher
BUSE
Keywords
mergers and acquisition, bank performance , First Capital Bank and Barclays Bank
Supervisor
NIL
Item sets
Department of Banking and Finance
Media
JOHN ROSEMARY.pdf

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