Abstract
Ghana has witnessed a wave of mergers and acquisitions (M & As) in the banking industry following the bank recapitalization initiative by the government in 2008. This raises an important question concerning the trade-off between the possible efficiency gains and efficiency losses as banks merge into one large unit. The objective of this study was to find out how Mergers & Acquisitions have impacted service quality of consolidated banks in Ghana. A descriptive and explanatory design was adopted as the study sought to describe customer perceived service quality and to also explain the relationship between M & As and service quality. An ANOVA and T-tests techniques were used to analyze primary and secondary data gathered. Findings from the study indicated that M & As had positive impact on overall service quality. The conclusion drawn by the researchers indicates that mergers and acquisitions offer superior growth and financing option for banks. This in turn promotes economic efficiency through improvements in costs and services delivery.
Highlights
Commercial banks play crucial roles in the financial industry and the economy of Ghana
An efficient economy is to a large extent driven by an efficient financial system which in turn is dependent on an efficient banking system
Since 1988 successive governments of Ghana have undertaken financial sector reforms for the purpose of improving the efficiency of the financial system. An effect of these reforms has been a surge in mergers and acquisitions amongst Ghanaian commercial banks, during the post-regulatory capital directive of 2008
Summary
Commercial banks play crucial roles in the financial industry and the economy of Ghana They contribute significantly to the efficiency of the money and capital markets through their intermediary role. Since 1988 successive governments of Ghana have undertaken financial sector reforms for the purpose of improving the efficiency of the financial system An effect of these reforms has been a surge in mergers and acquisitions amongst Ghanaian commercial banks, during the post-regulatory capital directive of 2008. After 2008 three M & As have been consummated, Ecobank (EBG) acquiring The Trust Bank (TTB), Access Bank acquiring Intercontinental bank, and Bank of Africa acquiring Amalgamated bank This raises an important question concerning the trade-off between the possible efficiency gains (resulting from replacement of inefficient management, structures, processes, etc) and the possible efficiency losses (as a result of excessive exercise of market power, managerial turf battles, downsize disruptions, high associated costs, etc). It will reinforce the finding that Regulation is the most important driver of change in Ghanaian banking industry (Banking Survey, 2012)
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