Enyi , P. E.
BANKS CONSOLIDATION IN NIGERIA: A SYNERGISTIC HARVEST.
In order to strengthen the competitive and operational capabilities of banks in Nigeria with a view
towards returning global and public confidence to the Nigerian banking sector and the economy
in general, the Central Bank of Nigeria instituted a banking reform which saw most of the then
existing 89 banks merging with each other. It was earlier speculated in some financial analysis
quarters that the exercise might turn out to be one of those overblown hypes of an ailing
economy. This, however, has turned out to be the opposite as most post-merger results tend to
highlight that financial synergies exist. This paper tries to evaluate the authenticity of this
assertion. To do this, pre-merger and post merger financial statements of 4 consolidated banks
were obtained, adjusted, carefully analyzed and compared. The result revealed that all the four
merger groups produced in addition to operational and relational synergy, financial gains far more
than the 2+2=5 synergistic effects. The validating two-way ANOVA test also revealed that
variations in shareholders funds can significantly affect the value of total assets of a bank.
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