Post Merger Financial Analysis: An AI & ML tool for Banks

Abstract

This paper models the significance of mergers and acquisitions (M&A) in reviving the growth of obsolete or low performing organizations. In line with adapting to the changing circumstances and limiting exposure to the volatility, higher level of capital backing is necessary which only consolidation can achieve (Mantravadi, 2007). Banks being economic institutions are expected to be more directly involved in inclusive growth by including the whole economy in the growth and development, therefore, to support this belief, merger and acquisition as a strategic tool is studied. M&A is considered as one of the significant tools for organizational restructuring and value addition considering the volatility prevailing in the present business environment. It enables organizations to expand their horizon of operation, mitigating risks, explore new markets and geographical locations by creating synergies thereby increasing profitability gaining through competitive advantage. It includes the study of the factors and series of events that led the Government of India (GOI) to the merger of 10 public sector banks (PSB) into 4 merged entities, adoption of M&A as technique to achieve objectives moreover it studies acquisition of the Allahabad Bank by the Indian Bank to identify and interpret the purpose and potential of consolidation backed by a comparative analysis of pre-acquisition and post-acquisition performance of the above-mentioned banks. Key Words: Mergers and Acquisitions, Public Sector Banking (PSB), Indian Bank, Allahabad Bank, NPA and Synergy.