A Camel Analysis of Pre and Post Merger Performance of Banks in India

Economic liberalization as a product of globalization since the early 1990s has resulted in developing a sense of urgency among the corporate entities to analyse the impact of restructuring strategies on the performance of the organizations. Incidentally, the Government of India along with the Reserve Bank of India have initiated mergers and acquisitions of the Indian banking sector with the anticipation that it would accrue benefits to the banks in terms of economies of scale and also make an attempt to make the Indian banks more competitive and effective in the global sphere. In this paper, an attempt is being made to analyse and compare the pre and post merger performance of acquiring banks during the period 2000-2012 with the help of the CAMEL ratios. For this purpose 10 commercial bank mergers in India was selected for the study and different financial ratios are considered to reflect on the following important parameters like capital adequacy, asset quality, management efficiency, earning quality and liquidity.