Abstract:

The place of banks in the growth and development of a country can never be displaced. It is therefore obligatory to guarantee the continuous survival of the banking industry. Merger and acquisitions is perceived to be a catalyst in ensuring this phenomenon. Mergers and acquisitions became predominant in the banking sector in Nigeria in year 2005 in reaction to the Central Bank of Nigeria’s guideline to raise the minimum requirement of capital of the Nigerian deposit money banks from N2 billion toN25 billion. At that time, more than half of the deposit money banks were involved in merger and acquisitions. This research work analyzes the impact of merger and acquisitions on bank performance in the Nigerian banking industry from 2000 – 2013. The ordinary least squares method was used to examine the significant effect on bank performance mutually for the pre- merger and post-merger phases to find out if merger of banks resulted into any performance benefits in addition to its effect on efficiency of operations. Evidence proves that mergers and acquisitions have a tangible impact on bank performance and effectiveness of operations. We therefore recommend that deposit money banks should utilize the impact effectively so that they could play their role well in the growth of the real sector.