“SOME CASE STUDIES NAME: DEBSUBRO BHATTACHARJEE Registration no; 043-1121-0111-10 Roll no: Name of the college: Heramba Chandra College Name of university: Calcutta University Month and year of submission: February 2013 Name of the supervisor: Prof Parna Banerjee Name of the college: Heramba Chandra college AN. 99LEDGEMENTS The successful completion of this project work was only possible for the immense support, advice, enthusiasm, encouragement, and Guidance of several people around me. Their initiative was invaluable to the progress of the entire work. I would like to thank my advisor, Prof Parna Banerjee of Heramba Chandra college for giving me the opportunity to work in a very interesting area, and for her support and guidance throughout my entire working period. I would like to thank my brother Mr Debasish Banerjee. Without his guidance and persistent help this work would not have been possible. Beside I thank my parents for their love and support while I decide to be a “professional” student for awhile.Chapter 1: INTRODUCTION 1 | Chapter 2: CONCEPTUAL — FRAMEWORK Chapter 3: DATA INTERPRETATION AND ANALYSIS | Chapter 4 : CONCLUSION 28-29 31 30Slno Figure 1 | Figure 2 | [Tablet I Table2 | Table 3 Table 4 Table 5 Table 6 Table 7 Table 8 Graph 1 | Graph 2 [Figures | -+ Merger of HDFC and Centurion bank of Punjab Merger of Nedungadi bank and Punjab national | Bank ‘Table showing the details of data analysis Profile of PNB and Nedungadi bank for three years | | before merger Profile of PNB after merger for three years Combine profile of PNB and Nedungadi for three | years before merger “Mean deviation of Pre and Post Merger ratio of combined banks and acquired bank three years before Merger. | Profile of HDFC and Centurion bank of Punjab for | 25 23 Page.no | ‘Profile of HDFC after Merger for three years [26 24 | Comi file of HDFC and Centurion bank of || 27 <= Punjab before Merger for three years Mean deviation of Pre and Post Merger ratioof | 28 7 5 combined banks and acquired bank “Mean Deviation of PNB and Nadungadi bank Jy | Mean Deviation of HDFC and CBOP 28 VLChapter:1 INTRODUCTION Amaly ation refers to merging of two or more Companies to form a new company. In an amalgamation two or more companies are combined into one by merger or by one taking over the other Therefore the term amalgamation contemplates two kinds of activities: © Two or more company joins to from a new company. * Absorption of one by the other. According to the Oxford Dictionary Amalgamation means ‘Combining the two commercial companies into one’. One company can acquire another in several other ways including purchasing some or all of the companies’ assets or buying up its outstanding share of stock. According to INCOME TAX ACT 196) Amalgamation is the merging of two or more companies to form a new company , in such a way that all assets and Niabilities of the amalgamating companies becomes assets and Jiabilities of the amalyamated company. The process of Amalgamation is governed by sections 391 to 394 of the Companies Act 1956 and sequires the following approvals: 1, Shareholder approval 2, High court approvals 3, Creditors or Hanks approval 4, Keserve bank of Ludia approval 5. SUBS approvalAs per AS-14 there are two types of amalgamation © Amalgamation in the nature of MERGER © Amalgamation in the nature of PURCHASE ASe14 is applicable where acquired company is dissolved and separate entity ceased to exist and purchasing company continues with the business of acquired company. The company acquired is called the Transferor Company or Selling Company whereas the acquiring company which purchases the business acquired is called the ‘Transferee company or the purchasing company. Am: COMPANY ‘A’ is an | COMPANY ‘B’ is amalgamating | also an) company | amalgamating | | company a | AMALGAMATION | of | \ company A and A Vv’ ‘company B to form a : | | new company ‘AB’ |AS-14 describes some of the important objectives of amalgamation Which are as follows: + Proper utilization of all available resources. + To prevent exploitation of unutilized and underu and resources. + Forming a strong human base. + Reducing tax burden. + Improving profits. + Eliminating or limiting the competition. * Achieving savings in monitoring costs. For all amalgamation the following Disclosures should be made:- 1. Name and general nature of business of the amalgamating companies. 2. Effective date of amalgamation for accounting purposes. 3. The method of accounting used to reflect the amalgamation. 4, Particulars of the scheme sanctioned under a statute.w Need Of The Project In the globalized economy, Merger and Acquisition acts as an Mportant tool for the growth and expansion of the economy. The Justification of making the project is to create syne! Ovo plus Ovo is more than four and this helps the companies to merge which means at the tough times, Merger and Acquisition helps the companies in getting the benefits of greater market share and cost efficiency. In case of Indian banking system which is the main theme of the project due to M&A the banking industry shows a sign of improvement in performance and efficiency after the global sis in 2008-09. The main motive behind this project is to show that The Indian bankin ‘tem perform after Merger and Acquisition. After going through the available relevant rature on Merger and Acquisition it comes to know that most of the work done high lightened the impa A firm can t of M&A on different aspects of the companie achieve growth both internally and externally. Internal growth may be achieve by expanding its operation or by establishment of new units, whereas External growth may be in the form of Merger & Acquisition, Takeover of business, Joint venture, Amalgamation ete. Many studies have investigated the various reasons for Merger and Acquisition to take place. The two important issued studied by different academic relating to bank merger are i) the impact of Merger on operating performance and efficiency of banks.ii) Analysis of the impact of merger on the market value of the equity share of both transfer and transferor bank, According to SINHA PANKAJ and GUPTA SUSHANT alter a thorough study on pre and post analysis of firms, it had a positive effect as their profitability in most of the cases deteriorated liquidity. The study also indicated the positive effect on the basis of some financial parameters like Earnings Before Interest and Tax, Return on Shareholders Fund, Profit margin, Current ratio, Interest Coverage and Cost Efficiency. GOYEL K.A and JOSHI VIJAYA gave an overview on Indian Banking Industries and highlighted the changes occurred in the banking sector, It gave the idea that changes occurs afier M&A in the banking sector in terms of financial, human resource, and legal aspects. It also described the benefits come out through M&A and examined that M&A is a strategic tools for expanding their horizon. jated to human resource Researchers in some articles also raise iss management. R. SRIVASSAN gave the views of financial problems that occurred in the case of Merger and Acquisition and highlighted the cases for consolidation and discuss the synergy base Merger and Acquisition. KURIAKOSE SONY gave emphasis on the valuation practices and adequacy ‘of swap ratio used in Amalgamation of Banks DIRK and the use of swap ratio for valuation of banks. SCHIERE had explained the relationship between bank reputation after Merger and Acquisition and its effect on shareholders wealth, AHARON DAVID show the stock market bubble effect on merger and acquisition . He suggested that during the bubble period the investors take more risk.Objectives of the project It is seen that most of the works have been done on trends, policies and their framework, human aspects which is needed to he investigated, Whereas profitability and financial analysis of the merger have not give due importance, An attempt have been made to predict the future of the ition on the basis of finan ongoing Merger and Acqui performance and focusing mainly on Indian banking system. Each study is to carry out with some objectives and the objectives of this report are: of net profitability » evaluate the banks performance in tert © To examine the effects of merger on equity share holde © To find out the impact of merger on company’s debt equity ratio. * ‘To analyze the performance of banks after merger in terms of return on Capital employed ion. © To find out the basis of merger and acqu' * To study why the banks are g towards merger and cs acquisition. © To trace it out the related issues of pre and post merger case. To study the measures taken by the Government to increase MERGER & ACQU! SITION on banking sector. 6Research methodology For the purpose of evaluation, the investigation data is collected from MERGER & ACQUISITION of Indian Banking Industry during the post liberalization period. The data has been collected from the Annual Report of the four banks. Financial data has been collected from Bombay stock Exchange, National stock exchange, Securities: and Exchange board of India and money control for the study. Data Source For the purpose of this project report , data collected are’ of two types i) Primary data ii) Secondary data. Primary data is that data which is collected for the first time directly from the field of enquiry for a specific purpose. This data is completely original. Usually, primary data are published in some form by the collecting authority. On the other hand Secondary data is collected from published or unpublished sources. Secondary data is primary data collected by some other individual or agency and used by another person for the purpose of statistical interpretation. Data published by newspaper, periodicals are generally secondary data. Due to limitation in collection of primary data, the data presented throughout the project is mainly secondary in nature.Tools used The tools and techniques used for the study includes ratio analysis like Gross Profit Margin, Net Profit Margin, Operating Profit Margin, Return on Capital Employed, Return On Equity and Debt Equity Ratio. Other tools are AS-14, Mean Deviation, Bar diagram, Line charts ete. f studies. In this study I have taken two cases of Merger and Acquisition, one from the private sector bank and the other from the public sector bank. Here in both the cases Pre-merger i.e. 3yrs prior and post-merger i.e. 3yrs after are taken to show the-financial comparison between the banks. Before amalgamation two different banks carried out operating business activities in the market and after amalgamation the purchasing bank carrying business of both. The year of amalgamation is taken as base year and it is excluded from the study.Method OC analy sis Research problem: Unavailable of primary data and tick of Updated data, Secondary data: Mo case studies are shown one of UDEC jab andl the other is Nedungadi bank and Centurion bank of Pu bank and Punjab national bank. Data collected are secondary in nature and are shows with the help of diagram, a Conclusion: Data collected are thoroughly studied and presented “with the help of charts and tables, Mean deviation are calculated (0, show the position of the banks after merger. 9Limitation of Study There were certain limitations faced while conducting this project and this are as follows:- 1. The principal limitation of the study includes the limitation of the various tools and techniques used. . Lack of primary data. 3. Lack of updated data. The time span of the project is very short. . Data unavailability from companies who are actually amalgamating. . It is a relatively new initiative and thus long term data analysis has not been possible.The following studies about Merger and Acquisition have been described with the help of following chapters. CHAPTER 1: This chapter is the introductory part of the project which includes the background, need of the project, its objectives and the method of its studies. At the end of this chapter there are certain limitations faced while studying this project. CHAPTER 2: This chapter includes the study about the role of merger for the expansion of banking sector both in India and outside India, their present condition and future condition. It also includes the name of some amalgamating banking institutions and their date of merger. The background of the sample banks which I have selected for the studies are also discussed in this chapter. CHAPTER 3: This chapter includes the presentation of the project and its analysis. Presentations have been described with the help of some graphs, charts and tables. CHAPTER 4: This chapter includes the conclusion part of the project and some future prediction regarding Merger and Acquisition. It also shows the condition of the banks after Merger.CHAPTER 2 CONCEPTUAL FRAMEWORK Merger and Acquisition played a vital role for the expansion of banking sector both in India and outside India. It can be said that the country. At first let us discuss the effect of Merger in the it effects across e Indian banking system. Merger and Acquisition immediately impact organization with change in ownership, ideology, practice etc. ‘The banking system of India was started in the year 1770. The first Bank of India was The Hindustan Bank which was established in the year 1770 followed by Bank of Bombay in 1840 and the Bank of Madras in the year 1843. The first bank established at Calcutta was the Bank of Calcutta during the time of East India Company in the year 1840. This bank merged in the year 1921 to form a new bank known as Imperial Bank of India. In the year 1955 Imperial bank came to be known as State bank of India. The Government of India had adopted the route of Merger with a view to re-structure the banking system. To protect the interest of the depositor many small and weak banks merged with other banks. This type of merged is known as Forced merged. From the through study it has been seen that all the pre-reform merger fall under this forced merged category and in the post reform period thirteen out of twenty-one merger falls in this category. When aspecific bank shows some serious symptoms of sickness RBI u/s 45(1) of banking regulation act 1949, specify them as weak hank. In the course of Merger all the assets and liabilities of the weak bank are taken by the purchasing bank and ensure payment to all depositors. Here are few examples of weak banks that have been merged:- 1. Bank of Bihar merged with State bank of India in the year 1969, 2. Traders bank Itd merged with bank of Baroda in the year 1988. 3. United industrial bank Itd merger with Allahabad bank in the year 1989, 4. New bank of India merger with Punjab national bank in the year 1993. 5. Times bank itd merger with HDFC bank Itd in the year 2000. 6. ICICI Itd merged with ICICI bank Itd in the year 2002. 7. Nedungadi bank Itd merged with Punjab national bank in the year 2003, 8. Global trust bank Itd merger with Oriental bank of commerce in the year 2004. 9. IDBI bank Itd merger with IDBI Itd in the year 2005. 10.Bank of Punjab Itd with centurion bank Itd in the year 2005. 11.Sangli bank merger with ICICI bank Itd in the year 2007. 12.Bank of Rajasthan merger with ICICI Itd in the year 2010.The Indian banking system shows a sign of improvement in efficiency and performance after the global crisis in the year 2009 Government played a vital role to strengthen the financial system of the economy. According to 2011 ICICI bank stands second after SBI bank in terms of assets of the Indian banking sector. For the last ten years ICICI bank and HDFC bank from private sector and BANK OF BARODA and ORIENTAL BANK OF COMMERCE in the public sector involve themselves as purchasing bank on the Merger and Acquisition in the Indian banking sector. Now in case of European and Asian countries banks are owned by the Government. The banking system of this economy broke in to pieces due to number and size of institution, ownership pattern, use of modern technology and other structural features. Some commercial banks are at the cutting age of technology whereas some banks are going through financial crisis with management of financial and liquidity risk. Banking crisis have weakened the financial system of the countries. For this the Government has emerged an alternative ion of weak banks with different measure of Merger and Acqui financial sectors. Merger and acquisition had played a vital role in countries like Korea and South-East Asian countries due to serious banking crisis. Several studies have analyzed that a consequence of Merger wave in the US market. The Number of banking organization decrease during the period from 1980 to 2000. In case of European banking system the merger been most domestic. The impact of Merger and Acquisition has brought a win situation for the customers because the customers are left with a high range of product with a low range of price. All this have been possible 14due to proper information and technology which allows them to save cost. n have grown significantly in China in Merger and Acquis recent years or so. Government agencies played a vital role in approving Merger and Acquisition in China, The reason for rapid growth of Merger and Acquisition in China are as follows: 1. Economic reforms in China. 2. China accession to World Trade Organization. However an important role is played by the Chinese Government in regulating the Merger and Acquisition activities in China. Both social and commercial aspects are taken into consideration by the Chinese Government in the approval of merger and acquisition. Now in this study I have taken two private sector banks and two public sector banks. Let us know about the financial position and background history of those merger banks. Punjab National Bank (PNB) was established on 19" may in the year 1894 under Indian Companies Act. It has been the distension of being the first Indian Bank to have been started solely with Indian capital that has been survives to the present. In the year 2003 Punjab National Bank merged with Nedungadi bank Itd. Nedungadi was the oldest Private sector bank of Kerala. At the time of Merger with Punjab National Bank the share value of this bank was zero. The result of this Merger was that its shareholders received no payment for their share.HDFC bank was incorporated in the year 1994 by Housing Development. Finance Corporation Lid. It is India’s largest Housing finance company. It was among the I companies to receive ‘In principal’ approval from the RBI. In the year 2000 Times bank Itd was merged with HDFC Itd and this was the first merger of two private sector bank. In the year 1994 Centurion bank was r HGF Hore Bank FY og We understand your world (eorite con) Bank of Punjab Figure | incorporated. It was a joint Venture between 20" century Finance Corporation and its Association and Keppel group of Singapore. In the year 1995 It was Amalgamated with 20" century Finance Corporation. In the year 2005 on 29" June the boards of Director of centurion bank and the Bank of Punjab agreed to a merger of the two banks. The combine bank took as its name Centurion Bank of Punjab. In 2008 HDFC bank acquired Centurion bank of Punjab. All employees of Nedungadl Bank will became the employees of PNB on same Entire paid-up ‘capital and reserves ‘of Nedungadi Bank wil be traated as provision for bad and doubttul dabts and dapreciation. All azects, liabiltics, powers, claima ‘and demande will be traneferred to PNB: from a dats to bo netifiad by the RBI. ‘Tha books of Nedungad will be closed, baluiced and the balance sheet prepared an at November 2, 2002, ‘The draft merger proposal might require the Intervention of DICQC to minimlee any aero do How this bank merged and what | was the condition after merger were discussed in the next chapter under Data result to PNB. Interpretation.CHAPTER:3 DATA INTERPRETATION & ANALYSIS In this study I have selected two banks on each case one from public sector and the other from the private sector. In the first case Merger of Punjab National Bank and Nedungadi Bank Ltd which took place in the year 2003 on 1" of February. In the second case Merger of HDFC bank and Centurion Bank of Punjab which took place in the year 2008 on 23” of May. In order to analyzed the financial performance of the bank after Merger and Acquisition the financial and accounting ratio like gross profit margin, net profit margin, operating profit margin, return on capital employed return ‘on equity and debt equity ratio have been calculated. TABLE No. Table Details “l Profile of PNB and Nedungadi banks | before Merger for three years. 2 Profile of PNB after Merger for three years Combine profile of PNB and Nedungadi | bank before Merger for three years | Mean deviation of Pre and Post Merger ratio of combined banks and acquired bank Profile of HDFC and Centurion bank of Punjab before Merger for three years 17Profile of HDFC alter Merger for three years 7 * Combine profile of HDFC and Centurion hank of Punjab before Merger for three years Mean deviation of Pre and Post Merger ratio of combined banks and acquired bank Figure 3 In the first case the Merger of Nedungadi Bank with the Punjab National Bank is shown and the financial performance between the pre & post Merger in the table 4 has been compared on the basis of the above ratio. In the study it has been found that there is no difference in the mean of gross profit. However the net profit margin increase after the merger so it can be said that the performance of the Bank has improved in post merger. The operating profit shows significant decline which indicate that it has no effect after merger. The return on Capital employed has increase after the Merger and this shows the positive impact of Merger on Investment and also the positive impact of return on Equity which means the Equity shareholders will get more return after the Merger. Lastly the Debt-equity ratio also improved after Merger so it directly increases the performance of the banks. The study shows that after Merger the performance of the bank improved a lot. The tables are shown below:Table 1: Profile of Punjab National bank and Nedungadi Bank for three years before Merger announcement [- Nedungadi Bank Itd | Punjab National bank a 31" arm far (march | march | march march | march =| march 2000 2001 2002-2000, | 2001 | 2002 | Gross profit | 89.67 | 52.94 | 92.39 | 76.56 75.03 76.91 31" margin Net Profit /9.01 | -38.25 | 0.81 791 790 | 8.45 margin | Operating 67.79 36.60 | 49.30 62.44 61.75 62.20 | | profit margin | fRocP - 084 | -3.56 0.08 0.75 0.73 0.77 Return on |) 14343 | -664.70 [1245 [192.30 | 218.45 | 264.97 | equity Debt. Fquity | 157.82 [172.53 [141.59 | 226.84 — | 267.64 | 304.05 ratio Data source: Moneycontrol.com 1 'GROSS PROFIT RATIO= gross profit/sales *100 NET PROFIT RATIO= net profivsales" 100 OPERATING PROFIT MARGIN= OPERATING PROFIT/SALES*100 RETURN ON CAPITAL EMPLO’ ‘et profivtotal assets" 100 RETURN ON EQUITY= Net profil equity shareholder fund *100 DEBT EQUITY RATIO= total debv shareholders fund, 19Table 2: Profile of Punjab national bank for three years after MERGER [Punjab National Bank [Bist march | 31st march | 31° march | 2004 2005 2006 | | Gross profit margin 76.16 75.16 72.53 Net profit Margin 14.25 116.66 15.01 | | Operating Profit Margin 52.15 55.35 59.69 | Return on capital employed | 1.08 Lu 0.99 Return on equity 417.90 "447.23 456.48 Debt-Equity ratio 336.24 335.82 400.79 | Data source: Moneycontrol.comTable 3: Combined profile of Punjab National Bank and Nedungadi_Bank for the three years before the merger announcement. Nedungadi bank and Punjab National bank (31 march 2000. 31° march 2001 31" march 2002 i} “Gross profit 76.96 margin Net profit | 7.95 Margin Operating 62.60 Profit margin /ROCE [o7 ROE 190.06 Debt-Equity | 223.68 ratio Data source: Moneycontrol.com 7731Table 4: Mean deviation of Pre-Meri nd_Post-Merger Ratio of Combined banks and Acquired Banks. Mean | Gross profit margin | pre 76.21 | | post, 74.62 Net profit margin pre 7.59 LL _post 15.31 Operating profit margin pre | o1.ss post |5 73 7 “Return on capital employed | pre 0.70 _ post 806 - Return on equi pre 2.07 post 4s | Debt-Equity ratio pre 2.61 st 3.57 Mean 80 70 60 - 50 20 30 20 10 a ~_~-o2e = Mean pre post pre post pre post pre post! pre post pre post Gross Net profit Opercting profit, Retunon Return on Debt- proft | margin | margin | capital | equity | equity margin emploved ratio Graph: 1 Mean = Za/n, Where x is the combine pre merger ratio of both the banks and nis the number of observationTable 5: Profile of Centurion bank of Punjab and HDFC bank for three vears before the merger announcement Centurion bank of Punjab | HDFC bank or ar yar art | march march | march march march march (2005 | 2006 = 20072005 2006 2007 Gross _ profit 53.41 [6987 |74.17 71.12 69.94 margin | | | | Net Profit 1524 (9.56 [2151 | 19.45 16.56 margin | | | “Operating 3723. | 22.43 ‘37.60 | 3.11 | 46.00 47.93 profit margin ROCP 0.65 | 1.08 0.65 1.29 1.18 1.25 Return on [29.75 |86.97 77.46 | 214.77 | 278.08 | 357.38 equity ‘Debt- Equity 35.27 [67.11 | 100.80 | 134.38 | 192.74 | 222.65 ‘ratio Data source: Moneycontrol.comTable 6: Profile of HDFC bank for three years after the Merger. HDFC bank Bist march | 31st march | 31° march | 2009 * | 2010 | 2011 ' Gross profit margin 74.76 74.66 76.29 Net profit Margin 13.74 18.23 19.70 "Operating Profit Margin 34.61 | er "Return on capital employed | 1.22 1.32 141 Return on equity 527.75 644.18 843.96 " Debt-Equity ratio 342.04 393.93 479.29 Data source: Moneycontrol.comTable 7: Combine profile of Centurion Bank of Punjab and HDFC bank for three years before the Merger announcement Centurion bank of Punjab and HDFC bank : 31 march 2005 | 31 march 2006 | 31% march 2007 | Gross profit | 72.32 68.42 69.88 margin ‘Net profit | 20.22 18.81 15.48 Margin | | Operating 51.51 42.42 | 46.32 | Profit margin “ROCE 1.24 117 Lis "ROE (169.19 218.79 | 265.25 Debt-Equity 109.96 153.77 182.54 ratio Data source: Moneycontrol.comTable 8: Mean deviation of Pre-Merger and Post-Merger Ratio of Combined banks and Acquired Banks. a Mean | "Gross profit margin pre 70.21 - | _ | post | 75.23 | Net profit margin pre 18.84 | post 17.22 Operating profit margin pre | 46.75 | “post [5342 OT Return on capital employed [pre 1.18 — - post | 1.32 [Return on equity pre | 2.17 | ee __| | : | post | 6.71 Debt-Equity ratio pre 148 a post | 4.05 Mean | 80 —— — OO | 70 a | 60 7 | so | 40 — | 30 == | 70 7 Mean io - | 0 7 7 | ross profe| Netprott | operating | Return on | Return on [Debt-Equty| |"margin | margin | profit | capital | equity | ratio | | margin. | employed Graph:2 Mean = Ex/n, Where x is the combine pre merger ratio of both the banks and n is the number of observation. 26In the second case the Merger of Centurion bank of Punjab with HDFC bank the comparison between pre and post Merger we have seen that the mean value of gross profit margin has increase and which shows improvement in the gross profit. But in case of net profit and operating profit we can see a decline after merger. The mean return on capital employed not significant and shows that no change has been seen in term of investment after the merger. The mean of return on equity and debt equity ratio shows improvement the mean value of equity in post merger has been increased so it increased the shareholder return. It also shows the improved performance of bank after merger. Similarly the debt equity ratio also improved after the merger the mean value shows the change in debt equity ratio after merger.CONCLUSION & RECOMMENDATION From the above study we can see that after the Merger the performance of the banks have improved in both the cases. There are various motives which attracts banks to merger. The success of merger depends upon the synergy gains created after the merger. The financial performance of Punjab National bank have been improved after merger and it effects positively, whereas in case of HDFC bank the financial ratio was not positively affected after merger and no relation have been created between pre and post merger period. ‘The Indian banking system used Merger and Acquisition as a tool for expanding their business. Sick bank survived after merger, enhance branch network and increase market share and also improved infrastructure. For high competition in the market this strategy has been adopted by different banking system. Merger and acquisition is an important tool for the expansion of Indian Banking System. The combined performance of both the bank three years before merger and performance of Acquired banks three years after merger have been compared. In case of Merger of Nedungadi bank and Punjab National bank net profitability, return on capital employed, return on equity and debt-equity shows the improvement after the merger. In case of Merger of centurion bank of Punjab and HDFC bank the return 28on equity, gross profit and debt-equity shows improvement after the merger. This result suggests that the performance of the banks have increased after merger. The main motive behind Merger is Acquisition is to represent a very important form of banking restructure. It results in several advantages to the acquiring bank and target bank. © Economic of scale © Tax advantage Increase in the growth rate © Reduction of competition © Better market condition © Survival of the weak banks After the Merger it is seen that in various financial parameters of the bank performance have been improved. Performance of the bank in there net profitability have been improved in case of Nedungadi bank and Punjab national bank whereas in case of HDFC bank and Centurion bank of Punjab it decreases by margin. Again the objectives of this study are to show the position of the equity shareholders after the Merger. Position of equity shareholders in case of Nedungadi bank and Punjab national bank increases which means that the equity shareholders are in a good position and are able to recover their shares. While in case of HDFC and Centurion bank of Punjab return on equity increases which are very high rate than are expected. This is a vast area for future study. The impact of Merger and Acquisition only on acquiring banks by comparing pre and post merger performance and take more banks for the study which give a better result.BIBLIOGRAPHY ‘Singh Jagandeep (2008), “Impact of Merger Announcements * Anand Manoj & on Sharcholder'sWealth Evidence from Indian Private Sector Banks”, Vikalpa, Volume 33, © Goyal Dr. K.A. & Joshi Vijay (2011), “Mergers in Banking Industry of Indi: ‘Some Emerging Issues”, Asian Journal of Business and Management Sciences, Issn: 2047-2528, Vol. INo. 2, [157-165] + Kuriakose Sony & Gireesh Kumar G. $ (2010), “Assessing the Strategic and Financial rrities of Merged Banks: Evidence from Voluntary Amalgamations in Si Banking Sector”, Sci. & Soc, 8(1) 49-62, Indian * Moneycontrol.com Rawat, R.S, “Accounting Standard Issued by ICAI” * Schiereck Dirk, Griib Christof Sig! & Unverhau Jan (2009), “Investment Bank Reputation and Shareholder Wealth Effects in Mergers and Acquisitions”, Research In InternationalBusiness and Finance, 23, 257-273, «Sinha Pankaj & Gupta Sushant. (2011), Mergers and Acquisiti Pre-Post Analysis for the Indian Financial Services Sector”, 30Supe r Certificate This is to certify that Mr Debsubro Bhattacharjee a student of B.com Honours in Accounting and Finance of Heramba Chandra college under the University of Calcutta has worked under my supervision and guidance for his Project work and prepared a project report with the title EFFECTS OF AMALGAMATION ON THE FINANCIAL POSITION OF THE BANKS: some case studies. The project report which he is submitting is his genuine and original work to the best of my knowledge Place: KoL KATA Date: 26. 0.13 Signature: Parma Bomunges Name: PARNA BANERIEE Designation: 1 &CTU RER Name of the college: HERAMB A CHANDRA COLLEGEStudent Declaration There by declare that the project work with the title EFFECTS OF F THE BANKS: some case studies submitted by me for the partial fulfillment of the degree of B.com Honours in Accounting and finance under the University of Calcutta is my original work and has not been submitted earlier to any University for the fulfillment of the requirement of any course of study. L also declare that no chapter in this manuscript in whole or in part has been incorporated in this report from any earlier work done by other or by me. However, extracts of any literature which has been used for this report has been duly acknowledged providing details of such literature in the references. Signature: Debiubo hottie h owes . Place: HECANGA CHANDPA J LL ce Cotte Name: DEGSUBRo BHATTACHARTEE Address: |-WAte- GAG AN L ANE, PRINCE ANWAR SHAH ROAD ,LoIKATA” 280032 Registration no: 043-1121 - 01-10 Roll no: