Abstract on Concept Paper

Merger and Its Impact on Financial Performance of Commercial Banks in Nepal

Prepared By: Niraj Chataut

Abstract

This study investigates the influence of mergers on the financial performance of Nepalese
commercial banks. The study focuses on three critical areas: liquidity position, profitability
position, and capital adequacy position. The study utilizes a descriptive and analytical research
design, analyzing secondary data from the financial statements of three merged commercial
banks for three years before and three years after the merger. The study's population consists of
12 consolidated commercial banks, with a sample size of three banks chosen by a systematic
sampling method.

The findings of the study indicate that there is a significant difference in the liquidity position of
banks before and after the merger. The merged banks experience changes in their profitability
position, with some banks showing improved performance while others do not exhibit significant
changes. The study also reveals variations in the capital adequacy position, suggesting that
mergers impact the capital structure of banks differently.

The study adds to our understanding of the consequences of mergers on financial performance in
Nepal's banking system. The report gives insights into liquidity management strategies and
essential information for investors, bank executives, and regulators. It also identifies literature
gaps and provides as a resource for future merger and acquisition research. The study does have
drawbacks, such as the use of just secondary data and a focus on specific financial statistics.
Future study should take into account a broader range of performance metrics and use primary
data collection methods.
Keywords

Merger

Financial Performance

Commercial Banks

Liquidity Position

Profitability Position

Capital Adequacy Position