Performance Estimation of Merger and Acquisition of Certain Banks of India: A Statistical Analysis

Abstract

Consolidation in the banking industry worldwide can be attributed to the process ofderegulation and technological changes that facilitated many banks to provide a wider rangeof banking services across a larger geographical area. Basically consolidation in the bankingindustry is aimed at accruing gains through expense reduction, increased market power,reduced earnings volatility, scale and scope economies.Bank mergers can increase value by reducing costs and/or increasing revenues. Costreductions can be achieved by eliminating redundant managerial positions, closingoverlapping bank branches and consolidating back office functions.This method of statistical analysis provides a simplistic, reader friendly version of presenting complexdata regarding performance of a set of players in the banking industry. The ranking systemmakes judging and analyzing the financial data of banks much simpler for the common man.Thus through this particular statistical data set, it can be established that private sector banks are at thetop of the list with their performances in terms of soundness being the best.