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Merger as an only rescue/choice: lessons from a public sector bank of India

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Abstract

The present paper examines the reasons that caused the fall of Dena Bank, which led to its merger with Bank of Baroda and Vijaya Bank (the merged bank is now known as Bank of Baroda). This paper measures the extent of deviations in financial performance and profitability of Dena Bank from 2007–08 to 2017–18. The findings of the study indicate that increasing non-performing assets and costs adversely impact the financial position of the fallen bank (Adhana, D., and Raghuvanshi, R. R. 2020. Big Bank Theory: A Study of Amalgamation Plan of 10 Public Sector Banks into 4 Entities. Available at SSRN 3559291). Further post-merger analysis from 2018–19 to 2021–22 shows that Bank of Baroda eventually incorporated the changes well. The finding would be helpful to investors, practitioners, academics, and policymakers to check the financial position of the bank to gain insights into the financial health of the bank and causes that led to its merger (Patel, R. 2018. Pre & post-merger financial performance: an Indian perspective. Journal of Central Banking Theory and Practice 7 (3): 181–200.).

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Authors and Affiliations

  1. University Business School, Guru Nanak Dev University, Amritsar, Punjab, India

    Gaganpreet Kaur

  2. Department of Commerce and Business Management, DAV University, Jalandhar, Punjab, India

    Anju Bala

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  1. Gaganpreet Kaur
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  2. Anju Bala
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Correspondence to Gaganpreet Kaur.

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Appendix

Appendix

See Tables 1, 2, 3, 4, 5, 6, and 7.

Table 1 Comparative statement of balance sheet of Dena Bank
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Table 2 Common size statement of balance sheet of Dena Bank
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Table 3 Trend analysis of balance sheet of Dena Bank
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Table 4 Common size income statement of Dena Bank
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Table 5 Comparative income statement of Dena Bank
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Table 6 Trend analysis of income statement of Dena Bank (2008–2018)
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Table 7 Ratio analysis
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Kaur, G., Bala, A. Merger as an only rescue/choice: lessons from a public sector bank of India. J Bank Regul (2023). https://doi.org/10.1057/s41261-023-00216-9

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