Does Management Quality Matter in Generating Post-Merger Synergy in Acquiring Bank? A Case of Indian Banks
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Sarbapriya RAY Department of Commerce, Vivekananda College, University of Calcutta, Thakurpukur, India
Mergers and acquisitions are noteworthy corporate strategic measure that assists the merged entity in external growth and afford it competitive advantage. The study tries to evaluate methodically the consequence of merger of United Western Bank along with Industrial Development Bank of India in 2006 and subsequent merger of IDBI bank with LIC of India in 2019 on their financial performance in terms of different financial parameters for the period from 2004-05 to 2024-25 dividing the entire period into two phases. Most of the financial indicators of Industrial Development Bank of India (IDBI) after undergoing merger with United Western Bank (UWB) in 2006 and LIC of India in 2019 exhibit noteworthy progress in their outfitted performance during post-merger period.
Post-merger regression analysis suggests that impact of management quality, capital adequacy and sensitivity to interest rate risk on profitability (ROA) parameter have improved much in comparison with entire study period’s regression analysis (both pre- and post-merger taken together) in both mergers. It can be inferred from the regression analysis that merger of these above two banks and subsequently with LIC has significant impact on earning capabilities of the Bidder Bank (IDBI) in terms of creating synergy through augmented managerial efficiency and subsequently by capital adequacy and non-interest income related sensitivity.
© The Author(s) 2026. Published by RITHA Publishing. This article is distributed under the terms of the license CC-BY 4.0., which permits any further distribution in any medium, provided the original work is properly cited maintaining attribution to the author(s) and the title of the work, journal citation and URL DOI.
Article’s history: Received 22nd of December, 2025; Revised 17th of January, 2026; Accepted for publication 27th of January, 2026; Available online: 2nd of February, 2026; Published as article in Volume II, Issue 1(3), 2026.
Saha, S., & Ray, S. (2026). Does Management Quality Matter in Generating Post-Merger Synergy in Acquiring Bank? A Case of Indian Banks. Applied Journal of Economics, Law and Governance, Volume II, Issue 1(3), 7-35. https://doi.org/10.57017/ajelg.v2.i1(3).01
Conflict of Interest Statement: The authors declare that the research was conducted in the absence of any commercial or financial relationships that could be construed as a potential conflict of interest.
Disclaimer: The authors are thankful to anonymous referees for making valuable comments in the earlier draft of the article. In spite of our sincere attempts in revising the article, if any pitfall remains, the responsibility solely lies on us.
Acknowledgment/Founding: N/A
Data Availability Statement: Data available on request: The data presented in this study are available on request from the corresponding author.
Ethical Approval Statement: All data were fully anonymised prior to analysis. Moreover, this study is based partially on the analysis of previously published literature and did not involve human participants, personal data, or animal subjects. Therefore, ethical approval was not required.
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