An Impact of Mergers and Acquisitions on Productivity and Profitability of Consolidation Banking Sector in India

The Financial sector improves to introduce by the Indian Government during the early 1990s and the key parameters like globalisation and post -liberalisation of the world economy, Indian banking has begun to change itself. It is experiencing scenario to change known as ‘consolidation’ of Indian banking. In this paper interpret the financial performance of banking sector pre and post -merger their activities consolidated by the stronger financial institutions. This paper analysis the Impact of M& A’son productivity and profitability of consolidation in the Indian Banking sector.The current paper examined the performance, strengthens and weakness of the sample two banks i.e.one public and one private sector banks based on the financial ratios from the perspective of pre and post – merger grounds. The collection of data covers financial performance of selected banks from 2004-05 to 201415. The statistical tools are arithmetic mean, standard deviation, t-test and p-value etc. to use gauge the various financial ratios before and after merger analysis.Ratios of studies are used to compare pre and post -merger financial performance evaluation of consolidation banks, test analysis and multiple comparisons which realisation the efficiency of the sample banks. Positioned on the analysis of ICICI Bank concluded that Net Profit Margin, Operating Profit Margin, Return on Capital Employed, Return on Net Worth, Interest Coverage, Deposit per Employee and Credit Deposit Ratio there is significant difference but non-significant difference with respect to Gross Profit Margin, Dept-Equity Ratio, Current Ratio, Quick Ratio, Earnings per Share and Business per Branch. Positioned on the analysis of State Bank of India concluded that there is non-significant difference in respect to Gross Profit margin, Operating Margin, Return on Capital Employed, Dept-Equity, Interest Coverage and Current Ratio but there is significant difference with respect to Net Profit Margin, Return on Net Worth, Quick Ratio, Credit Deposit Ratio, Earnings per Share, Deposit per Employee, Credit per Employee, and Business per Branch. The study concluded that the banks have been positive effects when distinguished between pre – mergers and postmerger period.