BIG BANK

THEORY-Mergers
and Acquisitions
BY PSC GROUP-12(RETAIL MANAGEMENT)
 Introduction

 Benefit economies of scale

 Source of growth in any economy
 Efficient approach to expand into
new markets
 Major role for corporate
restructuring
 REASONS
 Increase is offset by higher staff
costs
 Return on equity improves because
of decrease in capital
 Restructure the loan portfolio of the
acquired bank
 Improved lending policies
ADVANTAGES
OF MERGERS
Larger bank is capable of facing global competition
Reduce the cost of banking operations
Better NPA and Risk management
Help in improving the professional standards
Decisions on High Lending requirements can be
taken promptly
DISADVANTAGE
S OF MERGERS
Acquiring banks have to handle the burden
of weaker banks
It is difficult to manage the people and
culture of different banks
Destroys the idea of decentralization
Large banks are more vulnerable to global
economic crisis
Coping with staff disappointment could be
another challenge
THANK YOU