STUDY ON

“IMPACT OF MERGERS AND ACQUISITION IN INDIAN

BANKING SECTOR”

SEMINAR AND WRITE-UP REPORT

M.B.P.G. GOVT. COLLEGE HALDWANI(NAINITAL)

Submitted for partial fulfilment of requirement for the award of degree

of
Master of Commerce
of
Session 2024-2026

Submitted by Under the Supervision of

Suman Sharma Professor C.S Joshi Sir
Roll no.
Enrololment No.- KU24200067 M.B.P.G. College Haldwani

ABSTRACT
INTRODUCTION….
The banking industry is important to the functioning of every contemporary economy.
It is essential to the smooth and effective operation of the economy andin the financial
industry it is one of the most important financial pillars. A nation's financial system is critical
to its economy. Banks are unique in that they not only hold and manage vast amounts of
uncollateralized public assets in a fiduciary capacity, but also use these assets as collateral for
loans.

A bank is a financial entity that accept deposits from the public and also grants advances and
loans to the public. The foundation of contemporary trade and commerce is banking. A
banking firm is defined by the Banking Companies Act, 1949 as one that conducts banking
operations in any state of India worldwide.

The process of receiving deposits of money in the open that are receivable on call or
withdrawn by cheque, draft, or other means that aims lending or investing the deposits is
known as banking. As a result, banks serve as a conduit for capital between investors and
savers. They bring the community's idle resources to life and put them to good use.

Thus, the essential activities of banks that make them Financial Institutions are:

 Accepting deposits made by public

 Providing loans to public

Since Post Office Savings Bank does not lend money, it is not a bank even though it takes
deposits. Banks are not financial institutions (FIs), such as LIC, UTI, IDBI, and so forth.
Banks and financial institutions differ in the following ways:

1. Financial institutions lend money; banks do not accept chequable deposits.

2. They don't offer general services or carry out agency tasks.
3. Although they cannot create credit, they can increase the amount of money in
circulation.

The Reserve Bank of India (RBI) and the Government of India (GOI) had made great efforts
to draw lessons from the crisis and lessen the likelihood that it will happen again now that it
is almost over. In order to keep stability of price in the economy, the RBI is implementing the
required monetary policy measures. The main goal of the bank is to receive deposits and
provide loans to the general population, such as those for businesses, schools, farmers
looking to boost their output, and other purposes.

Recent development in Banking sector

The Indian banking sector has seen significant upheaval over the last two decades as a
result of the country's economic growth and financial sector reform. As a result, the
system has become more commercially appealing as the asset's profitability has increased.
Below, are some key changes bought in recent years:
1. Computerization in Banks
2. Core Banking Solutions(CBS)
3. Automated Teller Machines Services

MERGER
When two or more businesses come together to form one, it's called a merger. To create a
new entity, one or more corporations may combine or merge with another business.

Merging can be done in 2 ways:

1. Merging by absorption
2. Merging by consolidation

Consolidation, on the other hand, is the process of combining two or more things into one.

ACQUISITION

The act of one business assuming operational control of another is referred to as an

acquisition. Acquire the majority of the company's shares, which entitle the holder to vote at
a general meeting, or exert influence over the board of directors composition of the other
company.
The shares may be acquired during the acquisition process in return for business stock or for
cash. The acquired firm is still in operation, but its investors have changed without the
company'scharter.
TYPES OF MERGERS
Vertical, horizontal, circular, conglomerate, and reverse mergers are the different types of
mergers.

BANK PROFILE

MERGER NO. 1 : PUNJAB NATIONAL BANK, ORIENTAL BANK OF

COMMERCE AND UNITED BANK OF INDIA

 PUNJAB NATIONAL BANK

 On May 19, 1894, Punjab National Bank was established. It is a multinational
banking and financial services organisation based in India.
 The Punjab National Bank, an Indian state-owned business with its headquarters in
New Delhi, is one of the many leaders.
 It spanned 764 cities, 6937 branches, and 10681 ATMs with over 80 million clients.
Punjab National Bank led the list of state-run banks in India with the most loan fraud
cases nationwide, according to the RBI.
 ORIENTAL BANK OF COMMERCE
 The founding chairman of Oriental Bank of Commerce, the late Rai Bahadur Lala
Sohan Lal, founded the bank on February 19, 1943, in Lahore. The nationalisation
date was April 15, 1980.
 The registered office was moved from Lahore to Amritsar, and newly established
bank offices in Pakistan had to be shuttered.

 UNITED BANK OF INDIA

 In 1950, United Bank of India was founded.
 In 1969, it became nationalised.
 United Bank was created by merging Union Bank.
 In addition to more than 1300 branches, it has 15 branches abroad.
 United Bank of India has 56 years of solid experience.
 United Bank of India possesses 300 billion rupees worth of assets overall.

MERGER NO. 2 : CANARA BANK AND SYNDICATE BANK

 CANARA BANK
 Subba Rao Pai founded Canara Bank in July 1906; at the time, it was known as the
Canara Hindu Parliament Fund in Mangalore.
 The bank was renamed Canara Bank in 1910.
 This bank was nationalised in 1969.
 Canara Bank opened its one thousandth branch in 1976.
 Canara Bank made history in 1996 by being the first bank in India to receive an ISO
accreditation for "Total Branch Banking" at its Seshadripuram branch in Bangalore.

 SYNDICATE BANK
 Syndicate Bank is the most significant commercial bank in India, having been
founded in Udupi, Karnataka, in 1925. The bank was once known as Canara Industrial
and Banking Syndicate Ltd. when it was founded.
 By Shri Upendra Ananth Pai, three visionaries. A businessman, Dr. T M A Pai, a
physician, and Shri Vaman Kumara, an engineer, set out to give the local weavers
financial support.
 The Indian government nationalised Syndicate Bank on July 19, 1969.
 This bank's headquarters were located in Manipal, India, a college town.
 There are thirteen major commercial banks in India. The primary goal of the bank was
to provide financial support to the Weavers in the area.

MERGER NO. 3 : UNION BANK OF INDIA , ANDHRA BANK AND

CORPORATION BANK

 UNION BANK OF INDIA

 Mahatma Gandhi launched the Union Bank of India, a limited business based in
Mumbai, which was formed on November 11, 1919.
 The Union Bank of India was the first bank to offer ATMs in India.

 ANDHRA BANK
 Andhra Bank is a public sector bank in India.
 It was established on November 20, 1923.
 The distinguished liberation fighter and multidimensional intellect Dr. Bhogaraju
Pattabhi Sitaramayya founded Andhra Bank.
 It has operated in 25 states and three Union Territories. • It has more than 1900
branches, 15 extension counters, and more than 1100 automated teller machines.

 CORPORATION BANK
 In Udupi, a small town in South India, Corporation Bank was established on March
12, 1906.
 It was nationalised in 1980 and went public in 1998.
 Corporation Bank has a distinct track record of reporting earnings from the beginning.
 The highest-ever dividend of 200% was declared for FY 2010–11, continuing the
dividend payout record from the beginning.

LITERATURE REVIEW
 Corporate restructuring is crucial for corporate survival in today's competitive
climate. Mergers and acquisitions (M&A) are now widely regarded as one of the most
effective business restructuring processes. M&A decisions are crucial to corporate
performance because they help companies achieve higher efficiency by leveraging
synergies and growth prospects.
The banking sector in India has been one of the best performers in the market. India's
banking industry, worth Rs 77 trillion (US$ 1.30 trillion), meets worldwide standards
and requirements. Indian banks, as the nation's leading financial institutions, have
used mergers and acquisitions as a strategic tool to improve their performance.[1].

 According to Humphrey, Willeson, Bergendahl, and Lindblom (2006), industry

consolidation occurred primarily as a result of financial and technological innovation,
which transformed the optimal production functions of financial organisations. The
enabling force was a wave of financial deregulation, which was required for banks
and other financial services to take full use of the new manufacturing processes and
technical developments revolutionised back-office processing, front-office delivery
systems, and payments systems[2].

 Mergers and acquisitions can drive growth and expansion in any industry, including
the Indian banking sector. Merging with a larger bank helps weak banks survive.
Mergers and acquisitions in the Indian banking sector have begun after the
recommendations of the Narasimham Committee II. The committee proposed that
"merger of powerful banks / financial institutions would make for stronger economic
and commercial sense and would be a case where the whole is more than the sum of
its parts and have force multiplier effect [3].

 Mergers and acquisitions began in 1920 with the formation of the Imperial Bank of
India, which merged three presidency banks (Bank of Bengal, Bank of Bombay, and
Bank of Madras) to become the State Bank of India. Several M&A transactions
between banking institutions were later recorded during the pre-independence period.
Because of technology advancements, the scale at which financial services and goods
are produced has expanded, allowing banks to increase their size and scale of
production[4].
 After Merger And Acquisition (M&As) ,it was found that the bank was not able to
maintain their liquidity that has been able to harnees the synergies came from this
amalgamation. The study demonstrated a comparison between pre and post
examination of the firms. It also demonstrated the favourable benefits on the basis of
some financial parameters including Earnings before Interest and Tax (EBIT), Return
on Shareholder Funds, Profit margin, Interest Coverage, Current Ratio, and Cost
Efficiency, among others[5] .

RESEARCH METHODOLOGY

 OBJECTIVE OF THE STUDY

 To compare the Banks performance and its efficiency before & after the merger of
banks.
 To investigate the various changes that occurred as a result of bank merger.
 To determine whether mergers aided the bank’s expansion and development.

 Sampling Design
To gain a better understanding of the impact of all the mergers and acquisitions on
bank financial performance in India. Four recent bank mergers were taken into
account when conducting the analysis.
 Merger1: Punjab National Bank ,United Bank Of India and Oriental Bank of
Commerce
 Merger 2: Cannara Bank and Syndicate Bank
 Merger 3: Corporation Bank, Andhra Bank and Union Bank Of India

 Details of Data collection

Secondary data found on the banks' official websites was used to conduct the analysis.
Secondary data is information that is already available and does not require further
investigation or analysis
 This Study is based on the Secondary Data. It comprises of exploratory and
descriptive research.
1. Exploratory Research : Exploratory research is a method of investigating
unexplored problems in the past. Exploratory research is qualitative in nature.
However, an exploratory study with a large sample size might also be
quantitative.
2. Descriptive Research : Scientists and researchers use descriptive study
design as an effective method for gathering information about a specific
population or topic. This type of research provides a comprehensive and exact
picture of the characteristics and actions of a certain group or issue.

The data was collected with the help of online books, internet , using google
scholar , scopus.com ,web of science systematic literature review (SLR) tried to
followed. Keywords used were “MERGERS” , “ACQUISITION” , “INDIAN
BANKING SECTOR” in google scholar.

Total research papers found were approximately 60 papers and filters used were
subject area Management and Accounting , Banking etc.

Papers published and in press , documents from journals were considered. Papers
from last 10 years (2003-2024) were considered. After using the filters total
results found were 40 papers.

For references APA style (American Psychologist Associates ) was used.

 Types of Data analysis Tools:

The per share ratio and key performance ratios, which were found in secondary
sources as data analysis tools in the study. The ratios are calculated over two-year
period. The firms depict the situation prior to the merger, while the second year will
depict the following the merger. The impact of mergers on a specific bank is died by
comparing the situation before and after the merger in terms of key financial ratios.
The following are the various ratios that were used in the analysis:
 Earnings per share (EPS)
 Cash EPS
 Diluted EPS
 Return on Capital Employed
  CASA
 Return on Assets
 Net Profit Margin
 Net Interest Margin
 Return on Net Worth
 Interest Income
 Cost to Income
 Operating Expenses
 Interest Expenses

DATA ANALYSIS AND INTERPRETATION

In general, financial analysis is performed before and after mergers and acquisitions to assess
the change in bank performance. The analysis will make use of a few key financial ratios. A
financial ratio, also known as an accounting ratio, is statistics derived from an organization's
financial records, such as its balance sheet and profit and loss statement. It offers a report on
all quantitative financial statements for a corporation. It evaluates a company's operational
and financial performance from a variety of angles, including liquidity, turnover, solvency,
and profitability.
The various types of ratios and other indicators that will be used to evaluate banks' financial
performance will be covered .

1. Basic Earning Per Share - Before we get into the interpretation of Basic EPS,
let us first define EPS. Earnings per share, or EPS, is used to quantify a company's
profitability. The earnings per share (EPS) calculation is used to determine the value
of a company's outstanding shares. It also allows analysts to commiserate and
determine who has the best accurate earnings estimates.

BEPS= [(NET INCOME- PREFERRED DIVIDEND)/WEIGHTED AVERAGE OF

COMMON SHARES OUTSTANDING DURING THAT PERIOD]

2. Diluted EPS- Diluted EPS, also known as Diluted Earnings per Share, is a profit
formula that determines how much income each share will receive if all dilutive
securities are sold. In other words, diluted EPS demonstrates the impact on basic
 earnings per share of completely diluted measures such as common options, bonds,
preferred

DILUTED EPS =(NET INCOME-PREFERRED STOCK DIVIDENDS)

/(AVERAGE OUTSTANDING SHARES+DILUTED SHARES)

3. Cash Earning Per Share – Cash EPS, or Cash Earnings per Share, is a revenue and
profit metric that determines a company's financial performance by measuring cash
flows (cash inflows and outflows) per share. Cash EPS ignores any non-cash variables
that might effect normal earnings per share in order to display the company's genuine
earnings.
The variations between Basic EPS, Diluted EPS, and Cash EPS are summarised
below: -
Basic EPS includes all of the industry's outstanding stock shares. The measurement of
diluted EPS only includes convertible shares, such as workplace stock options,
warrants, and debt. Cash Earnings per share is a per-share figure that covers the entire
financial statement.
Cash EPS = [OPERATING CASH FLOWS/SHARES OUTSTANDING]

4. Net Profit Share- A company's net profit is the total of its earnings after deducting all
expenses. Depreciation and taxes are deducted from the costs of normal business
operations. Net profit, sometimes known as the "bottom line," is an accurate predictor
of a company's profitability.

5. Return on Capital Employed- ROCE is an abbreviation for Return on Investod

Capital; it is a profitability statistic that compares net operating profit to investors
based solely on capital. Return of capital employed to determine how much financial
gain each dollar of used capital.
ROCE- [EBIT /CAPITAL EMPLOYED]
ROCE- EBIT/ (TOTAL ASSETS -TOTAL LIABILITIES)

6. CASA - Current and Savings Account Ratio (CASA) is the term used to refer to this
ratio. Current Account Bank Account (CASA) is also known as Current Account
Savings Account. This is a unique feature that banks offer to their customers in order
to encourage them to keep their money with them. The profile uses a combination of
checking and mo, which is the percentage that the tal deposits in the company's
convenient package. The CASA ratio indicates that the bank has a higher percentage
 of savings and current account deposits, as well as greater operational efficiency. This
ratio is one of the indicators used in India to assess a bank's profitability.

CASA RATIO = (CASA DEPOSITS/ TOTAL DEPOSITS)

7. NET PROFIT MARGIN - Net Profit Margin, or simply Net Margin, is a measure
that determines how much operating earnings, or profit, were generated as a
percentage of revenue. In essence, it is the ratio of an income statement's income to its
revenues. It is expressed as a percentage but can be converted to decimals. It is one of
the most crucial markers of a company's financial performance. A corporation can
establish whether or whether its strategies are advantageous by examining net profit
margin increase and reduction, as well as revenue-based profits estimates.

NET PROFIT MARGIN=[REVENUE – COST REVENUE]

NET PROFIT MARGIN = (NET INCOME*100/NET SALES)

8. RETURN ON ASSET- Return on Assets, or ROA, is a financial indicator that

illustrates how much money a firm can make from its assets. It also assesses the
company's performance and compares the profit or net profit created by funds
invested in assets. The higher the Return on Assets (ROA), the better the company's
performance and management's ability to maximise the organization's economic
resources.

ROA= NET INCOME* AVERAGE ASSETS

9. RETURN ON NET WEALTH -Return on Net Wealth is a metric that calculates

how much money a company produces on its capital and is used to determine
profitability. It also determines whether the organisation can continue to expand its
system year after year. The higher return on net worth suggests that the corporation is
effectively managing its shareholders' funds. On the other side, a lower return on net
worth implies that the company is not trying to make the greatest use of its resources
and is not investing in attractive prospects.

NET WORTH =SHAREHOLDER’S EQUITY +RESERVES +PREFERNCES

RETURN ON NET WORTH-MISCELLANEOUS EXPENSES- SHARE CAPITAL
10. NET INTREST MARGIN- 10. NIM is the gap between the interest revenue
received by banks and finance firms and the amount of interest compensated to
lenders in proportion to the value of their assets. The interest rate and inflation rate
have a large impact on financial interest income. Positive net interest income indicates
that banks are investing effectively. In contrast, a negative net interest margin
suggests wasteful bank investment. It is equivalent to the net income or gross profit
margin of non-banking financial institutions.

NIM= INTEREST REVENUE – INTEREST EXPENSES-AVERAGE EARNING

ASSESTS

11. COST TO REVENUE - The cost-to-income ratio is one of the profitability

ratios used to assess an organization's efficiency. It is used to compare a bank's
operating expenses and revenue. The company's performance is improving, as
indicated by its decreasing cost-to-income ratio. Is primarily used to determine how
profitable a bank is. It also shows the banks' overall efficiency. The expense ratio and
profitability of a bank are inversely related. A larger net income signifies poor
performance, whereas a lower expense ratio indicates good performance.

COST TO REVENUE RATIO =OPERATING COST/OPERATING INCOME

12. INTEREST TO TOTAL ASSET RATIO-The "Interest Income to Total

Assets Ratio" measures how much a bank relies on interest on bank loans to finance
itself. A high "Interest Income in Total es ratio" is a positive sign for banks, however
an extremely high ratio is not necessarily desired. As seen by a low "Interest Income
to Total Assets" ratio, banks rely on non-interest revenue streams.

13. OPERATING EXPENSE RATIO - Operating expenses are the costs

associated with a company's primary source of revenue, operational activities.
Operating expenses include rent, brand management, and funding. These costs are
almost unavoidable when it comes to achieving smooth, profitable, and efficient
innovation. In keeping the business functioning
Total assets are the book values of all assets possessed by a person, company, or
organisation. This is a common restriction included in personal financial loan
covenants. After accounting for amortisation on the statement of financial position,
the overall asset investment management can be established.
 14. TOTAL INTEREST TO RATIO - 14. Interest expenditures are the overall
rate of investment paid by a corporation on its loans. It represents the expense of
taking out a loan. Interest expenses are important because they can significantly affect
a company's financial performance if they are too high. Changes in interest rates can
be detrimental to businesses, especially those with a significant number of loans.
The word "total assets" was already defined.
 We used the merger and acquisition of three banks to analyze data based on the above
mentioned ratios:
1. On February 15. 2021, Indian Bank and Allahabad Bank merged to form Indian
Bank
2. On April 1, 2020, Canara Bank and Syndicate Bank merged to form Canara Bank.
3.: On April 1, 2021, Punjab National Bank, Oriental Bank, and United Bank merged
to form Punjab National Bank.

ALLAHABAD BANK AND INDIAN BANK MERGER

When Allahabad and Indian Bank merged they formed the country's 6 thlargest public sector
bank, with a firm value of 8.05 lakh crore and significant branch networks in the south, north,
and east. This merger, which combines the 113-year legacy of Indian Bank and the 155-year
history of Allahabad Bank, provides a firm platform for client service in India. According to
the RBI's directions, all Andhra Pradesh cash machines were integrated into Indian Bank and
began operating as Indian Bank branches. The statement was founded in an organisation with
stronger fiscal strength and substantial national connectedness, with 6,000+ branch offices,
4,800+ ATMs, and 42000+ personnel serving 120 million+ clients with a main business

more than Rs. 8 crore/trillion.

The extra branch appearances will strengthen Indian Lender's network in the birthwestiem,
central, and eastern areas, offering a bigger geographic network in the northwest million
clients. This method will provide banks with operational, income, and cost advantages.
Clients in the corporate and small company sectors would benefit from enhanced lending
capacity.
SWAP TO RATIO.
For every 1,000 ( thousand) equity shares of Allahabad Bank worth Rs 10.00 each, 115
equity shares of Indian Bank (transferee bank) are issued (transferor bank).
We analysed the merger of Indian Bank and Allahabad Bank using their main financial
parameters as of March 31, 2020 and March 31, 2021, respectively.

Below is a table to show the conclusions and research Swap Ratio in Detail

PER SHARE RATIO 31ST MARCH 2020 31ST MARCH 2021

BASIC EPS 14.33 26.61

CASH EPS 17.33 32.21

DILUTED EPS 14.33 26.61

NET PROFIT/ SHARE 12.37 26.60

Table 1 : Table Showing Per Share Ratios of Indian Bank

After Merger Before Merger

32.21

26.61 26.61 26.6

17.53
14.33 14.33
12.37

BASIC EPS CASH EPS DILUTED EPS NET PROFIT/SHARE

Figure 1.1: Column Graph Showing Per Share Ratio of Indian Bank

The per-start share ratios of both Indian banks have improved since their merger with
Allahabad Bank, as seen in the table and figure above. The Basic EPS and Diluted EPS have
both improved dramatically, following the same pattern. As a result, it can be concluded that
the merger was favourable to the bank, and its performance has greatly improved.

KEY PERFORMANCE
RATIO 31ST MARCH 2020 31ST MARCH 2021
ROCE 2.14 1.89

RETURN ON NET 3.94 11.88

WORTH
 NET INTEREST MARGIN 2.45 2.50

CASA 34.64 42.29

NET PROFIT MARGIN 3.51 7.68

RETURN ON ASSETS 0.24 0.47

COST TO INCOME 41.12 41.47

INTEREST INCOME 6.91 6.24

OPERATING EXPENSES 1.42 1.65

INTEREST EXPENSES 4.45 3.74

42.29 41.47
41.12
Figure 34.64

1.2:
Bar
11.88
7.68 6.916.24
Graph 2.14
1.89 3.94 2.452.5 3.51 1.65
4.453.74
0.24 0.47 1.42
CE ... N A IN S E E S S
R O W R GI CA
S
R G SE
T
OM OM SE
T
N SE
T S C C S
NE M
A
M
A A IN IN A PE
ST IT ON TO T G EX
ON E O F N T RE
S
T I N
S T
RN T ER PR UR OS TE E RA E RE
T U IN T T C IN P T
RE ET NE RE O IN
N Before Merger After Merger
Showing Key Performance Ratio of Indian Bank

The table and figure above indicate Indian Bank's primary quality proportions following its
merger with Allahabad Bank. Following the transaction, Allahabad Bank's expense assets and
interest expenditure assets have all fallen. After the merger, the Current and Investments
Email Address Ratio (CASA), Net Profit Ratio, Return on Assets (ROA), Return on Net
Wealth, Net Investment Margin, Cost to Income, and Operational Costs Assets all improved.
When the Indian Bank amalgamated with the Allahabad Bank, it benefitted Indian Bank's
expansion and growth significantly. Indian Bank has risen from ninth to seventh place among
public banks as a result of the merger, which has been hailed as one of the industry's most
successful.
 CANARA BANK AND SYNDICATE BANK MERGER
When the Syndicate Bank amalgamated with Canara Bank that has created India's 4 th largest
public sector bank, with a company or organization of 15.20 lakhs and a branch network.
Canara Bank's market capitalization is Rs 10.4 lakh crore, while Syndicate Bank's market
capitalization is Rs 4.7 lakh crore. Both of these financial institutions have a strong presence
in the South, therefore this merger would result in cost savings due to network crossover, a
comparable work environment, and more profitable expansion. The newly amalgamated
organization is massive in size and has a wide geographical reach, with a focus on
community banking, customer satisfaction, and fulfilment.
The united bank will significantly enhance the reach of financial goods to the general
population, allowing it to capitalise on its size, magnitude, and influence while also helping
current financial inclusion efforts. Consumers of both the banks of India will gain immensely
from this merger, as the unified bank will have a broader geographic coverage through its
10,000+ branches, over 9,000 employees, and a corporate mix of more than Rs 15 lakh crore
to service them effectively.
Swap Ratio:
The share swap for Syndicate Bank's merger with Canara Bank is 158 Canara Bank equity
shares per 1,000 Syndicate Bank equity shares.
We used Canara Bank's key financial ratios as of March 31, 2020 and March 31, 2021 to
analyse the merging of Canara Bank and Syndicate Bank into Canara Bank.

PER SHARE RATIO 31ST MARCH 2020 31ST MARCH 2021

BASIC EPS -26.60 16.91

CASH EPS -17.51 20.51

DILUTED EPS -26.60 16.91

NET PROFIT/ SHARE -21.70 15.53

Table 2 : Table Showing Per Share Ratios

 30
20.51
20 16.91 16.91 15.53

10

0
BASIC EPS CASH EPS DILUTED NET
EPS PROFIT/
-10 SHARE

-20 -17.51
-21.7
-30 -26.6 -26.6

Before Merger After Merger

Figure 2.1 Graph showing per share ratio of Canara Bank

As demonstrated in the table and figure above, Canara Bank's per start sharing ratio has been
significantly improved as a result of the development following its attempted merger with
Syndicate Bank. The Basic Earnings per share and Diluted EPS have both improved in
keeping with the trend, while Money EPS has also increased significantly.

KEY PERFORMANCE
RATIO 31ST MARCH 2020 31ST MARCH 2021

ROCE 1.32 1.78

RETURN ON NET
WORTH -6.78 5.05
NET INTEREST
MARGIN 1.81 2.08
CASA 31.37 32.73

NET PROFIT MARGIN -4.56 3.69

RETURN ON ASSETS -0.30 0.22

COST TO INCOME 40.83 43.52

INTEREST INCOME 6.76 6.00

OPERATING EXPENSES 1.59 1.67

 INTEREST EXPENSES 4.94 3.91

43.52
40.83
32.73
31.37

5.05 -0.3 6.76 6 4.943.91

1.32E1.78 -6.78 1.812.08 -4.563.69 0.22 1.591.67
H N A N S E E S S
R O C R T
R GI CA
S
R GI SE
T
OM O M N SE N SE
O A A S C C E E
W M M A IN IN P P
T T IT ON TO T EX EX
NE S F S G T
RE O N T RE IN ES
ON TE PR T UR C OS TE AT ER
N IN T N R T
UR T NE RE I E IN
ET NE OP
R

Before Merger After Merger

Figure 2.2 :Graph showing the key performance ratios of Canara Bank
The table and figure above show Canara Bank's key performance ratios prior to and
following its merger with Syndicate Bank. Following the merger, the Return on Assets
(ROCE), Current but also Savings Account Ratio (CASA), Net Profitability, Return on
Assets, Return on Net Worth, Net Interest Number of Votes, Cost to Income, and Operating
Bank proved to be extremely helpful to Canara Bank's growth and development.
Expenses/Total Assets all showed significant improvement, whereas Investment Income
Assets and Interest Expenditures Assets fell. As a result, the merger between Canara Bank.

PUNJAB NATIONAL BANK , UNITED BANK OF INDIA AND

ORIENTAL BANK OF COMMERCE MERGER
Punjab National Bank is a market leader in terms of financial resources and branch network.
The merged entity of Oriental Bank of Commerce and United Bank to become Punjab
National Bank, some type of a bank with something like a market capitalization of 17.94 lakh
every year and 12.236 branches, considerably boosting the bank's geographical reach.
Customers of both the bankswould benefit greatly from the merger because the merged bank
would have a larger geographical reach, more than 13,000 ATMs, one lakh employees, and a
combined business of more than Rs 17 lakh crore to serve them effectively and efficiently.
SWAP TO RATIOS:
For every 1,000 shares of OBC and United Bank of India, shareholders will receive 1,150 and
121 PNB shares, respectively. PNB has a face value of Rs 2 per share, while OBC and United
Bank of India have a face value of Rs 10 each.
We used Punjab National Bank's financial indicators from March 31, 2020 and March 31,
2021 to examine the merger of Financial Institutions, Oriental Bank of Commerce, and
United Bank into Punjab National Bank.

PER SHARE RATIO 31ST MARCH 2020 31ST MARCH 2021

BASIC EPS 0.62 2.08

CASH EPS 1.40 2.86

DILUTED EPS 0.62 2.08

NET PROFIT/ SHARE 0.50 1.93

Table 3 : Table showing per share ratio of Punjab National Bank

2.5

1.5

0.5

0
BASIC EPS CASH EPS DILUTED NET
EPS PROFIT/
SHARE

Before merger After Merger

Figure 3.1 Graph showing per share ratios of Punjab National Bank
The Punjab National Bank's per-share proportions have improved dramatically following its
merger with Oriental Bank of Commerce and United Bank, as illustrated in the table and
figure above. Both the Basic and Diluted EPS have greatly improved in the same manner.
KEY PERFORMANCE
RATIO 31ST MARCH 2020 31ST MARCH 2021
ROCE 1.80 1.85

RETURN ON NET
WORTH 0.58 2.41
NET INTEREST MARGIN 2.09 2.41

CASA 42.97 44.54

NET PROFIT MARGIN 0.62 2.50

RETURN ON ASSETS 0.04 0.16

COST TO INCOME 41.81 44.10

INTEREST INCOME 6.47 6.40

OPERATING EXPENSES 1.44 1.61

INTEREST EXPENSES 4.37 3.98

Chart Title
40
30
20
10
0
CE TH IN S A IN ET
S E E
SE
S
SE
S
RO OR
G CA G S OM OM
W AR AR AS IN
C
IN
C PE
N
PE
N
T M M EX EX
NE ES
T
F IT ON TO E ST G T
R O N T R IN ES
ON TE PR T UR COS N TE AT ER
IN T T
RN T NE RE
I E R
IN
ET
U
NE OP
R

Before Merger After Merger

Figure 3.2 Graph showing key performances of Punjab National Bank

The table and graph above illustrate Punjab National Bank's crucial success ratios prior to
and following its merger with Oriental Bank of Commerce and Union Bank. Return on
Equity (ROCE), Current and Cash Reserves Acct Ratio (CASA), Net Profit Ratio, Return on
Assets, Reversion to Net Worth, Net Investment Margin, Cost to Income, and Operational
Costs Assets have all improved, however Net Interest Assets and Interest Outgoings Assets
have both notably reduced.

FINDINGS AND CONCLUSIONS

 FINDINGS
 Mergers have shown to benefit banks in practically every manner. Mergers have
increased banks' opportunities to innovate in technology and operations. Customers
can now access more modern amenities. The study was undertaken using something
similar to the Hank's financial indicators, and a test was performed on that premise,
demonstrating that fusions represent a huge benefit to banks. Except for a handful,
practically every ratio rose significantly as a result of the merger with other financial
organisations.
 The above-mentioned ratios are valid indications for analysis. The improvement in
ratios, as seen in the graph and table above, is critical to the ability of the banks.
 Banks can reap the benefits of the merger, and their customers will be pleased.
 Mergers enable banks to gain additional resources and expand their operations.
 Banks can now raise more money, and existing shareholders can acquire equity in the
financial institution.
 The above-mentioned ratios are valid indications for analysis. The improvement in
ratios, as seen in the graph and table above, is critical to the ability of the banks.
Banks can reap the benefits of the merger, and their customers will be pleased.
 Mergers can lead to improved planning and more efficient use of financial resources.
 It is clearly seen that the ratios after the merger is increased that benefited the banks to
the large extend.
 Due to merger the efficiency and effectiveness both have increased of the merged
banks.
 Finally, mergers benefit banks by creating new prospects for expansion.

 CONCLUSION
  Public ownership, similar compensation structures and career growth prospects for
staff, and a Common Banking Services solution were among the variables that helped
to remove hurdles to convergence and smooth the merger's operationalization. Mergers
and acquisitions appear to be a strategic tool for augmenting or expanding India's
banking sector. Consolidated firms could now gain the benefits of synergy. This is
especially true when a regional branch network exists.

 These bank mergers and acquisitions have not only led to the development of the
economy as a whole, as a fist has more power than a single finger to lift things, but the
merging of these banks and various other institutions has also led to development, such
as more job opportunities, increased growth and expansion opportunities, and so on.
Thus, if one is unable to function smoothly, this merger and acquisition provides a
significant benefit of just lending a shoulder and restarting from scratch.

 Mergers & Acquisitions are an effective technique for growth and expansion for the
Indian banking sector. Mergers with larger banks help weak banks survive.Global
competition requires banks to modernise and upgrade their technologies..Merging is a
notion that enhances and supports long-term development.

REFERENCES
[1] Ghosh, S., & Dutta, S. (2015). Mergers and acquisitions in Indian banking sector: Pre-
post analysis of performance parameters. International Organization of Scientific Research in
Journal of Business and Management, 17(3), 1-9.

[2] Goyal, K. A., & Joshi, V. (2011). Mergers in banking industry of India: Some emerging
issues. Asian Journal of Business and Management Sciences, 1(2), 157-165.

[3] Kotnal, J. R. (2016). The economic impact of merger and acquisition on profitability of
SBI. International Journal of Applied Research, 2(7), 810-818..

[4]Singla, M. L. (2015). MERGER AND AQUISITION IN INDIAN BANKING

INDUSTRY. International Journal of Research in Management, Economics & Commerce
Impact Factor: 5.662, ISSN 2250-057X, 5(4), 77-94

[5] Kashyap, D. C. (2021). Merger and acquisition in indian banking sector: A case study of
bank of baroda. Available at SSRN 3980653.