Background of the Study
Mergers and acquisitions (M&A) have become strategic tools for achieving business growth, improving financial performance, and enhancing competitive advantage. In the banking sector, M&A are often driven by the need to strengthen capital bases, improve efficiency, and comply with regulatory requirements (Olowe, 2024). In Nigeria, M&A have played a pivotal role in reshaping the banking landscape, particularly following the Central Bank of Nigeria's recapitalization policies.
The merger between First Bank and Wema Bank exemplifies the strategic use of M&A in navigating challenges such as limited market share and competition. This study explores the financial implications of this merger, assessing whether it has improved the financial performance and stability of the combined entity.
Statement of the Problem
While M&A are pursued with the expectation of creating value, their outcomes often vary. Many banks in Nigeria face challenges in achieving synergy, integrating operations, and realizing projected financial benefits post-merger (Okonjo, 2023). The merger of First Bank and Wema Bank provides an opportunity to assess whether the anticipated benefits, such as increased profitability and operational efficiency, have been realized.
Limited empirical research exists on the long-term financial impacts of bank mergers in Nigeria, particularly in the case of First Bank and Wema Bank. This study aims to fill this gap by analyzing the merger's effect on key financial metrics.
Objectives of the Study
Research Questions
Research Hypotheses
Scope and Limitations of the Study
The study focuses on the financial performance of the merged entity, covering the period from 2023 to 2025. Limitations include access to confidential financial data and external economic factors that may influence results.
Definitions of Terms
Synergy: The combined value and performance resulting from the integration of two companies.
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