ANALYTICAL STUDY ON THE MERGER OF BANK OF BARODA, VIJAYA BANK AND DENA BANK, ON THE BACK DROP OF THEIR NPAS

Banking Industry in India witnessed a large-scale merger in recent times, which was earlier often sought out solution in the corporates to improve the efficiency and profitability. Bank mergers and acquisitions are more often witnessed across Europe and America. We have witnessed few acquisitions/mergers in the past few decades after liberalization. Present situation of mergers in the Banking Industry is primarily due to the failure of some banks with respect to recovery of loans. This would result in incurring losses and failing to meet the liquidity needs of the deposits side. There have been mergers both in Public Sector Banks and Private Sector Banks. It is also observed that some private banks have been acquired by public sector banks in the interest of depositors and investors.This research paper focuses on and analyses the factors that lead to the merger of Bank of Baroda, E-Vijaya Bank and E-Dena Bank. The possible advantages and disadvantages are inferred. Seven years financial data before the merger decision of the three banks is collected for this analysis. Data analysis is done using the financial tools such as Ratio Analysis and Trend Analysis. Various ratios indicating the health of Advances side of the bank and its profitability are calculated. The trend of NPAs and the recovery patterns are studied. The suitability of merger decision with its after effects are proposed to be concluded.