Business Consolidation and Its Impact on Financial Performance: Evidence from the Ghanaian Banking Industry (Published)
The study provides empirical examination on the impact of business consolidation or mergers and acquisitions (M&A) on the financial performance of banks in Ghana. Both descriptive and correlational research designs were employed for the study. Two banks: Ecobank Ghana Ltd and Access Bank Ghana Ltd were chosen for the study. The annual reports of the banks from pre-merger period (2009 to 2011) and post-merger period (2012 to 2015) were used for the analysis. Two analysis techniques: ratio and regression analysis were used to examine the impact of mergers and acquisitions (M&A) on the profitability of these firms. Net profit margin (NPM) and return on capital employed (ROCE) were used as proxies for financial performance and Ordinary Least Square (OLS) regression model was used to estimate the level of impact of M&A on the performance of the banks. The study revealed that mergers and acquisitions (M&A) resulted to more than 80% growth in income and the net assets immediately after acquisition. The growth in profitability continued in subsequent years, however at a decreasing rates. With regards to net profit margin and return on capital employed (ROCE), the banks observed a marginal decline after three years of acquisition. The study further found empirical evidence to support the view that mergers and acquisitions (M&A) has a positive and significant impact on both NPM and ROCE. Accordingly, it is concluded that mergers and acquisitions (M&A) has a positive and significant impact on financial performance of banks.
Keywords: Acquisition, Agency Theory, Banks’, Consolidation, Mergers, Net Profit Margin, Return on Capital Employed (ROCE), synergy
COMMUNAL NON-FORMAL FINANCIAL MARKET SYSTEM DEVELOPMENT: A MODEL FOR NNOBOA MARKET SYSTEM (Published)
Communal market system of mobilizing resources or funding has been with the indigenous people in the past. In Africa, particularly in Ghana it has been with the traditional people up to today. As we find it had to move the economy as a whole up, the indigenous people through this means are making it up in life. The problem has been with the impulsion of the western capitalism, which thrives on greed and individualism. This article gives reasons why Ghana should introduce a second financial market with traditional flavor. It recommends the modification of the old land marks, nnoboa, with modern technology which thrived through trust, communality and reciprocity that worked before the invasion of the land by the west to force us into capitalism
Keywords: Capitalism, Development, Ghana, Market, Nnoboa, synergy