Performance analysis of Ghanaian banks with mergers and acquisitions noise

Abstract

Mergers and Acquisitions have been identified as an important strategy for corporate inorganic growth in the banking industry. SG-SSB Ltd has recorded impressive operating performance since 2003. It has therefore become a reference entity in the Ghanaian banking industry. Banks with merger and acquisition noise are also performing well with the Agricultural Development Bank, one of the banks with the most recent M&A noise recording impressive sustainable growth rate. Alberts (Decomposed) return on equity model was used to study the operating performance of Cal Bank, ADB and SG-SSB Ltd from risk return perspective to indicate whether the attractiveness of these banks as M&A candidates is due to poor performance. The study indicates that the banks with M&A noise in Ghana are attractive to potential acquirers because of impressive performance and high possibility of improved performance.