Investigating the Role of Mergers and Acquisitions in Shaping the Financial Performance of Nepalese Commercial Banks

Padam Bahadur  Lama; Prem Bahadur  Budhathoki; Samjhana  Thapa

doi:10.34118/djei.v17i1.4494

Padam Bahadur Lama Tribhuvan University, Saraswati Multiple Campus, Kathmandu, Nepal. https://orcid.org/0000-0002-1498-4480
Prem Bahadur Budhathoki Saraswati Multiple Campus, Tribhuvan University, Kathmandu, Nepal. https://orcid.org/0000-0002-1249-7005
Samjhana Thapa Saraswati Multiple Campus, Tribhuvan University, Kathmandu, Nepal. https://orcid.org/0000-0001-6610-0483

DOI: https://doi.org/10.34118/djei.v17i1.4494

Keywords: Acquisition, financial performance, merger, Nepalese banks

Abstract

This research paper examined the impact of mergers and acquisitions on the financial performance of Nepalese commercial banks. The study embraced the secondary data of 6 commercial banks and overall, the 60 observations were comprised in this study. The study employed descriptive research design and casual comparative research design. This study employed descriptive statistics, correlation, and regression for the analysis of data. The findings revealed that the EPS and CRR were positively and significantly associated with return on equity (ROE) which indicates that an increase in earnings per share and cash reserve ratio leads to an increase in profitability. In contrast, NPLR, CAR, and CDR found a negative relationship with ROE, which indicates that an increase in the non-performing loan ratio, capital adequacy ratio, and credit-to-deposit ratio leads to a decrease in profitability. Similarly, BS holds a weak positive relationship with ROE.

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