Analysis of Financial and Operational Performance of Banking Sector Consolidations: Indian Case Study with Mergers and Acquisition

2016 ◽  
Vol 4 (1) ◽  
Author(s):  
Gurbaksh Singh
Keyword(s):  
Financial Performance ◽  
Banking Sector ◽  
Profit Margin ◽  
Financial Ratios ◽  
P Value ◽  
Net Worth ◽  
Operating Profit ◽  
Before And After ◽  
Return On Capital ◽  
The Impact

The present paper analyses the impact of M&As on productivity and profitability of consolidation in the Indian Banking sector. It examines the performance of the two banks based on the financial ratios in the pre and post-merger period. The collection of data covers financial performance of selected banks from 2004-05 to 2014-15. The statistical tools are arithmetic mean, standard deviation, t-test, and p-value etc. to analyze the various financial ratios before and after the mergers. 14 ratios are used to compare pre and post-merger financial performance evaluation of consolidated banks. 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 have shown an improvement after the merger but in case of other parameters there is no significant improvement in the performance. The analysis of State Bank of India reveals there is no significant improvement after the merger. The study indicates that the banks have been positively affected when distinguished between pre-mergers and post-merger period.

The impact of financial ratios on the financial performance of a chemical company

2014 ◽  
Vol 10 (2) ◽  
pp. 154-160 ◽  
Author(s):  
Halimahton Borhan ◽  
Rozita Naina Mohamed ◽  
Nurnafisah Azmi
Keyword(s):  
Financial Performance ◽  
Negative Relationship ◽  
Secondary Data ◽  
Multiple Regression Model ◽  
Profit Margin ◽  
Financial Ratios ◽  
Content Type ◽  
Chemical Company ◽  
Operating Profit ◽  
The Impact

Purpose – The purpose of this paper is to examine the impact of financial ratios on the financial performance of a chemical company: LyondellBasell Industries (LYB). Some selected ratios: current ratio (CR) and quick ratio (QR) represent the liquidity ratios, debt ratio (DR) and debt equity ratio (DTER) represent the leverage ratios, while operating profit margin (OPM) and net profit margin (NPM) represent the profitability ratios. LYB faced financial problems after its merger and the financial performance of the company shrank to negative due to the world financial crisis. However, this company has bounced back after a year and is now the world's third largest chemical company based on revenue. Design/methodology/approach – The financial ratios were measured from 2004 to 2011, quarterly. A multiple regression model has been used and secondary data has been analyzed. Findings – The results shows that CR, QR, DR and NPM have a positive relationship while DTER and OPM have a negative relationship with the company's financial performance. Among the six ratios, CR, DR and NPM show the highest significant impact on the company's performance. Originality/value – This research paper contributed the result of the impact of financial ratios on the financial performance of a chemical company as the previous studies with this focus are hard to find and some of the sources are not specifically related to the topic.

scholarly journals The Impact of Mergers and Acquisitions on Financial Performance of Banks in the Kingdom of Bahrain during 2004-15

2017 ◽  
Vol 9 (4) ◽  
pp. 34-45
Author(s):  
Bushra A. Abdulwahab ◽  
Subhadra Ganguli
Keyword(s):  
Financial Performance ◽  
Banking Sector ◽  
Global Financial Crisis ◽  
Financial Statements ◽  
Significant Difference ◽  
Before And After ◽  
Future Strategy ◽  
Rating Model ◽  
The Impact ◽  
Accounting Ratios

Following the 2007 global financial crisis, more than 15 M&A transactions took place among financial institutions in the kingdom of Bahrain. This paper evaluates the impact of M&As on the financial performance of four such deals between banks in Bahrain. Data was collected from financial statements of the banks and the Bankscope database during 2004–2015. 15 accounting ratios were applied to CAMEL Rating Model approach. Financial modelling with Excel has been applied to test for the significance of changes in the financial performance of the banks three years before and three years after mergers. No significant difference in the financial performance of the local banks between pre and post M&As in the kingdom of Bahrain was observed. No significant difference in the financial performance of the acquirer bank or the target bank was observed except Bahraini Saudi Bank (target bank) which showed significant improvement in the financial performance after the merger with acquirer bank namely Al Salaam Bank. No significant change in the overall CAMEL ratios was observed for all banks involved in the M&As in Bahrain during 2004-15. The study provides an empirical analysis of the M&As before and after the mergers which can serve as a basis for further evaluation of future strategy of the banking sector in the kingdom of Bahrain.

scholarly journals ANALISIS PERBANDINGAN KINERJA KEUANGAN PERUSAHAAN SEBELUM DAN SESUDAH MERGER DAN AKUISISI PADA PERUSAHAAN YANG TERDAFTAR DI BEI

2016 ◽  
Vol 5 (2) ◽  
Author(s):  
Ayu Maulida
Keyword(s):  
Mergers And Acquisitions ◽  
Profit Margin ◽  
Financial Ratios ◽  
Return On Assets ◽  
Return On Equity ◽  
Operating Profit ◽  
Fixed Assets ◽  
Net Profit ◽  
Before And After ◽  
Equity Ratio

This study aimed to analyze the differences in financial performance before and after mergers and acquisitions based on financial ratios : Current Ratio (CR), Quick Ratio (QR), Debt to Assets Ratio (DAR), Debt to Equity Ratio (DER), Return On Assets (ROA), Return On Equity (ROE), Gross Profit Margin (GPM), Operating Profit Margin (OPM), Net Profit Margin (NPM), Fixed Assets Turnover (FATO), Total Assets Turnover (TATO), dan   Earnings Per Share  (EPS) at the companies listed on the Stock Exchange. This type of research is comparative , and sampling using purposive sampling. The type of data using quantitative data and data sources obtained from secondary data. The analysis technique used is the model for the Kolmogorov-Smirnov test for normality, and parametric test Paired Sample T Test to test hipoteisis. The results showed that there were significant differences between before and after mergers and acquisitions based on financial ratios Debt to Assets Ratio (DAR) in the comparative period of 2 years before and 2 years after puberty and acquisitions as well as comparison of 2 years before the 3 years after the mergers and acquisitions. The results also showed a significant difference based on financial ratios Debt to Equity Ratio (DER) at a ratio of 2-year period prior to 2 years after the mergers and acquisitions. While based on the ratio of Current Ratio (CR), Quick Ratio (QR), Return on Assets (ROA), Return on Equity (ROE), Gross Profit Margin (GPM), Operating Profit Margin (OPM), Net Profit Margin (NPM), fixed Assets Turnover (FATO), Total Assets Turnover (TATO), and Earnings Per Share (EPS), the results showed that there were no significant differences for all the study period.Keywords: Mergers and acquisitions, financial performance, quantitative, Paired Sample T Test

scholarly journals Pengaruh Kinerja Keuangan Terhadap Harga Saham

2013 ◽  
Vol 1 (1) ◽  
pp. 53-68
Author(s):  
Yoyon Supriadi ◽  
Muhammad Ariffin
Keyword(s):  
Financial Performance ◽  
Stock Price ◽  
The United States ◽  
Cement Industry ◽  
Profit Margin ◽  
Return On Equity ◽  
Financial Ratio ◽  
Financial Condition ◽  
Operating Profit ◽  
The Impact

Stock is an investment instrument which is prefered at the present. Basically, the purpose of investing in stock field is to get capital gain or investment rate return at high stage. Financial performance is a standard to find out the condition of a company based on its annual financial statement. Financial condition can be taken note of by making use of financial ratio analysis. The author utilizes Earning per Share, Return on  Assets, and Operating Profit Margin to know the financial performance. The purpose of this research is to find out the impact of financial performance on stock price. The author knows the financial performance from EPS (X1), ROA (X2), and OPM (X3) of Stock Price (Y). EPS, ROA, and OPM are taken by the author from performance summary originated in IDX. The research was conducted during the period 2006 through 2010 by taking samples at PT Indocement Tunggal Prakarsa Tbk. and PT Holcim Indonesia Tbk engaged in basic industry, that is cement industry. Based on the result of this research, it can be concluded that just Operating Profit Margin Ratio at PT Indocement Tunggal Prakarsa has significant effect on stock price, whereas Return on Equity and Earning per Share at the same company do not have significant effect on stoc price. Earning per Share, Return on Equity, and Operating Profit Margin at PT Holcim Indonesia Tbk. do not have ignificant effect. Therefore, it can be concluded that there are external factors influencing stock price at PT Indocement Tunggal prakarsa Tbk. and PT Holcim Indonesia Tbk. The example is global crisis 2008 originated in The United States presented impact on cement industry; the stock price of cement industry decreased then.   Keywords:financial performance (EPS, ROA, and OPM); stock price at the end of the year

scholarly journals Toughness of Indonesian banking sector facing global financial crisis 2008: Tests on welfare of shareholders

2014 ◽  
Vol 11 (4) ◽  
pp. 131-140
Author(s):  
Lindrianasari ◽  
Ahmad Zubaid Indra
Keyword(s):  
Financial Performance ◽  
Stock Price ◽  
Banking Sector ◽  
Global Financial Crisis ◽  
Stock Exchange ◽  
Global Crisis ◽  
Market Sentiment ◽  
Dividend Payments ◽  
Before And After ◽  
The Impact

This study aims to investigate the impact of the global crisis on the financial performance of banks in Indonesia. The study will also look at the impact of the crisis on the welfare of stakeholders in the form of dividend payments to shareholders. The initial assumption that we have built for this condition and for the explanation in the previous paragraph is that there is a difference between the payment of dividends to shareholders before and after the period of the global crisis. Proof of this assumption is also at the same time can give an answer to the resilience of the Indonesian economy during the global crisis. By using all populations banking companies listed in Indonesia Stock Exchange, this study compared the financial performance of the company before and after the next global crisis with its impact on the payment of dividends. This study shows that there is a significant decline in its net profit after the global crisis. But there is not enough result to support second hypotheses about decrease of share prices as an excessive market sentiment surrounding global crises. It looks at the stock price actually rose after the global crisis. Other conditions have been found in this study is that there is an increase dividends given to shareholders after the crisis. These findings shows that the banking sector in Indonesia has a fairly strong resilience in the face of the global crisis in 2008. This condition may occur due to the success of fiscal regulation of Indonesia Bank to save Indonesian economy.

scholarly journals The Influence of Bank Governance on Improving the Financial Performance- An Empirical Study on the Banks Sector in the Kingdom of Saudi Arabia: أثر حوكمة المصارف علي تحسين الأداء المالي – دراسة تطبيقية على قطاع المصارف في المملكة العربية السعودية –

2019 ◽  
Vol 3 (8) ◽  
Author(s):  
Ghada Othman Al- Jahdali, Rawia Reza Obaid
Keyword(s):  
Corporate Governance ◽  
Saudi Arabia ◽  
Financial Performance ◽  
Banking Sector ◽  
Cash Balance ◽  
Kingdom Of Saudi Arabia ◽  
Public And Private ◽  
Return On Equity ◽  
Before And After ◽  
The Impact

The study aimed to measure the impact of corporate governance on improving the financial performance in the banking sector in Saudi Arabia by measuring the impact of the profitability of Saudi banks، namely the profitability and liquidity indicators when applying governance. The analytical method was followed to achieve the objective of the study. The data of the financial statements were analyzed for the period 2010- 2017 to confirm six hypotheses related to measuring the existence of statistically significant differences between indicators of financial ratios before and after applying corporate governance. The results of the study showed that the liquidity indicators differ in 2010- 2013 (the accounting average of the cash balance ratio is 21%) from in 2014- 2017 (the accounting average of the cash balance ratio equals 18%)، which affected the rate of return achieved by the bank. The results also showed that excessive liquidity reduces profits، which is one of the Bank's most important objectives. Return on equity and return on assets were 4% and 1%، respectively، indicating that profitability is very low compared to high liquidity. The study recommended the need to promote the concept of corporate governance among all concerned parties and recommended the formation of specialized committees on governance in banks. Efforts should be made to adopt the concept of governance in the Kingdom of Saudi Arabia through cooperation between different public and private sectors.    

scholarly journals Dampak Covid-19 Terhadap Harga Saham dan Kinerja Keuangan Perusahaan

2020 ◽  
Vol 21 (2) ◽  
pp. 252-269
Author(s):  
Annisa Nadiyah Rahmani
Keyword(s):  
Financial Performance ◽  
Stock Prices ◽  
Stock Exchange ◽  
Financial Statements ◽  
Profit Margin ◽  
Return On Assets ◽  
Regression Methods ◽  
Operating Profit ◽  
Net Profit ◽  
The Impact

The purpose of this study to determine the impact of Covid-19 on stock prices and financial performance of companies on LQ-45 issuers listed on the IDX. This study examines the impact of Covid-19 on stock prices and financial performance before being exposed to Covid-19 for Q3 2019 and after being exposed to Covid-19 for Q1 2020. Stock prices are measured using closing stock prices and financial performance is measured using a ratio formula that is Return on Assets (ROA), Operating Profit Margin (OPM), and Net Profit Margin (NPM). This study uses a sample of LQ-45 companies that have published their financial statements on the Indonesia Stock Exchange (IDX).  This research uses multiple linear regression methods using SPSS 25. The results of this study indicate that (a) Pandemic Covid-19 has an impact on stock prices and (b) Pandemic Covid-19 has an impact on financial performance.

scholarly journals ANALISIS PERBANDINGAN NILAI ENTITAS, KINERJA KEUANGAN DAN POTTER FIVE FORCES ANALYSIS PERUSAHAAN PENGAKUISISI SEBELUM DAN SESUDAH AKUISISI: STUDI KASUS AKUISISI PT HOLCIM INDONESIA TBK OLEH PT SEMEN INDONESIA (PERSERO) TBK

2020 ◽  
Vol 2 (1) ◽  
pp. 63-77
Author(s):  
Ferry Irawan ◽  
Silsilia Sindy Dwijayanti
Keyword(s):  
Financial Performance ◽  
Profit Margin ◽  
Discounted Cash Flow ◽  
Return On Assets ◽  
Return On Equity ◽  
Business Valuation ◽  
Operating Profit ◽  
Net Profit ◽  
Before And After ◽  
Inventory Turnover

 This research aims to explain changes in profitability and financial performance, and compare entity values of PT Semen Indonesia (Persero) Tbk before and after the acquisition of PT Holcim Indonesia Tbk. The profitability was measured by profitability ratio in the form of gross profit margin, operating profit margin, net profit margin, EBITDA margin, return on equity, and return on assets. The financial performance was measured by liquidity ratio (current ratio), solvability ratio (liabilities to assets, liabilities to capital, and liabilities to equity), activity ratio (account receivable turnover, account receivable collection period, inventory turnover, and fixed assets turnover), and profitability ratio (gross profit margin, operating profit margin, net profit margin, EBITDA margin, return on equity, and return on assets). The entity value was determined by approaches in business valuation in the form of income approach with discounted cash flow method and market-based approach with guideline company method. This research used literature review as its research method with some data from www.idx.co.id, Bloomberg, and Damodaran. This research concluded that generally there was some decline in the profitability and financial performance of PT Semen Indonesia (Persero) Tbk, but there was increase in its entity value at the same time. Penelitian ini bertujuan untuk menjelaskan perubahan profitabilitas dan kinerja keuangan, serta membandingkan nilai entitas PT Semen Indonesia (Persero) Tbk sebelum dan setelah akuisisi PT Holcim Indonesia Tbk selesai dilaksanakan. Profitabilitas perusahaan diukur menggunakan rasio profitabilitas berupa marjin laba bruto, marjin laba usaha, marjin laba bersih, marjin EBITDA, return on equity, dan return on assets. Kinerja keuangan perusahaan diukur menggunakan rasio likuiditas (rasio lancar), rasio solvabilitas  (liabilitas terhadap aset, liabilitas terhadap kapital, dan liabilitas terhadap ekuitas), rasio aktivitas (perputaran piutang, periode pengumpulan piutang, perputaran persediaan, dan perputaran aktiva tetap), serta rasio profitabilitas (marjin laba bruto, marjin laba usaha, marjin laba bersih, marjin EBITDA, Return on Equity, dan Return on Assets). Metode penelitian yang digunakan yaitu metode studi pustaka dengan data yang berasal dari www.idx.co.id, Bloomberg, dan Damodaran. Kesimpulan dari penelitian ini adalah secara umum terjadi penurunan profitabilitas dan kinerja keuangan perusahaan, namun terjadi kenaikan nilai entitas perusahaan di saat yang bersamaan. 

scholarly journals MANAJEMEN LABA DAN KINERJA KEUANGAN PERUSAHAAN PENGAKUISISI SEBELUM DAN SETELAH MERGER

2013 ◽  
Vol 1 (2) ◽  
Author(s):  
Novi Puji Lestari
Keyword(s):  
Earnings Management ◽  
Financial Performance ◽  
Empirical Evidence ◽  
Profit Margin ◽  
Financial Ratios ◽  
Total Asset ◽  
Negative Direction ◽  
Net Profit ◽  
Before And After ◽  
Asset Turnover

PT. Dwikarya Indonesia MandiriE-mail: [email protected] purpose of this study is to obtain empirical evidence of whether the acquirers perform earningsmanagement prior to implementation of the acquisition. This type of research is a comparative studywhich compares the financial performance before and after the company making acquisitions. Analysisof financial performance is using financial ratios, including profitability, and activity. The results ofdata analysis shows that there was no indication of earnings management before the acquisitions conductedby the acquirer with Increasing income accruals. Furthermore, the company’s financial performanceas measured by the ratio of total asset turnover, net profit margin, returns on assets after theacquisition has a difference in the negative direction. The conclusion is that the acquirers before theacquisition are not convicted of earnings management with increasing income accrual. Acquirer’s financialperformance before and after the acquisitions have a difference, but the condition of thecompany is in sound condition.Keywords: Acquisitions, earnings management, financial performance

scholarly journals Assessing the Impact of Corporate Governance Index on Financial Performance in the Romanian and Italian Banking Systems

2021 ◽  
Vol 13 (10) ◽  
pp. 5535
Author(s):  
Marco Benvenuto ◽  
Roxana Loredana Avram ◽  
Alexandru Avram ◽  
Carmine Viola
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Banking Sector ◽  
Research Question ◽  
Interactive Effect ◽  
Banking System ◽  
Capital Adequacy ◽  
Banking Systems ◽  
Governance Index ◽  
The Impact

Background: Our study aims to verify the impact of corporate governance index on financial performance, namely return on assets (ROA), general liquidity, capital adequacy and size of company expressed as total assets in the banking sector for both a developing and a developed country. In addition, we investigate the interactive effect of corporate governance on a homogenous and a heterogeneous banking system. These two banking systems were chosen in order to assess the impact of corporate governance on two distinct types of banking system: a homogenous one such as the Romanian one and a heterogeneous one such as the Italian one. The two systems are very distinct; the Romanian one is represented by only 34 banks, while the Italian one comprises more than 350 banks. Thus, our research question is how a modification in corporate governance legislation is influencing the two different banking systems. The research implication of our study is whether a modification in legislation, thus in the index of corporate governance, is feasible for two different banking sectors and what the best ways to increase the financial performance of banks are without compromising their resilience. Methods: Using survey data from the Italian and Romanian banking systems over the period 2007–2018, we find that the corporate governance has a significant, positive and long-lasting effect on profitability and capital adequacy in both countries. Results: Taking the size of the company into consideration, the impact of the Index of Corporate Governance (ICG) on a homogenous banking system is positive while the impact on a heterogeneous banking system is negative. Conclusions: Our study provides evidence of the impact of IGC on financial performance and sheds light on the importance of the size of the company. Therefore, one can state that the corporate governance principles applied do not encourage the growth of large banks in heterogeneous banking sectors, thereby suggesting new avenues of research associated with new perspectives.

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