WHAT IS MERGER

WHAT IS CONSOLIDATION
WHAT IS ACQUISITION
REASONS BEHIND MERGER &
CONSOLIDATION (M&C)
MOTIVES BEHIND M&C
M&C PROCEDURE & RIGHTS
M&C IN PAKISTAN BANKING SECTOR
(PBS)

WHY MERGERS ARE TAKING PLACE IN

PBS
EXAMPLE OF BANK MERGER

MERGER
CONSOLIDATION
ACQUISITION
MODES OF ACQUISITION
ASSET DEAL
SHARE DEAL

Who can merge and consolidate?

Procedure for mergers and

consolidation.

REASONS BEHIND M&C

Increase in MCR
Low GDP growth
Political Transition
To lesson the competition
To strengthen the PBS

Two pairs of merged banks :

FBL with AFIB on 10/01/2002

AIBL with ALL on 15/03/2002

Profitability measures;
ROE &ROA ratios.
Capital adequacy measures;
SHE to TA & SHE to TCD ratios.
Long Term Solvency measures;
TL to TA ratio.

PROFITABILITY RATIOS
Table-1
CAPITAL ADEQUACY RATIOS
Table-2
LONG-TERM SOLVENCY RATIO
Table-3

Table-4

Table-5

The ROA & ROE ratios showed

insignificant improvement
The SHE to TA & SHE to TCD , TL to TA
ratios showed significant improvement

Thus concluding that M&C are

healthful
For the PBS