Case Study of Merger of Global Trust Bank & Oriental Bank of Commerce

(1) The large size of the bank account. The account represents 38% of Parmalat’s assets. It is not normal for such a big company having so much money in a single account.

According to the audited financial data generated the bank’s return on assets is substantially low given the vast assets portfolio it boasts of holding. In general the company is not getting sufficient value for the vast asset investment it holds, thus it would be equally good if the company undertook a more robust utilization of the assets at its disposal. The bank is open to measures such as; expanding the customer base and enhancing the credit book as well as diversifying its portfolio holdings. Thus, the management should take a better and more strategic choice in the overall allocation of the firm assets/capital to generate more revenue. In relation to other leading competitors in the Kenyan bank industry the company is quite performing despite the low

The government seems to be preparing the ground for the merger of Public Sector Banks (PSBs). After asking small banks to coordinate with large ones on key areas, it has now merged 19 Regional Rural Banks (RRBs) into eight entities, despite reservations by the Reserve Bank of India (RBI). It plans to merge more rural banks by the end of this financial year. RBI has expressed its displeasure at the move, saying the finance ministry didn't keep it in the loop while going ahead with the mergers. The ministry, however, argued it followed the Regional Rural Banks Act, which didn't mandate consultation with the Central Bank on such mergers. In the second round of consolidation of RRBs, the government has, for the first time, merged RRBs under different sponsor banks. The number of RRBs has been reduced to 71, as against 82 at the end of the last financial year. The government plans to reduce this number to 64 by March-end and to 48

The economic recession of 2009 pushed some financial institutions to bankruptcy. The banking industry was also a victim of this economic hardship. Some solid institutions like Bank of America, Trust Bank, and Wells Fargo take over other banks for different reasons: market power, diversification, cost savings, and external growth. These banks acquire all the assets and the liabilities of another bank. These banks obtained the property rights and new market power. This research paper is to look at the economic advantages of the merger and to make some predictions.

While some studies show there may be little or no improvements in the post acquisiton operating performance of merged banks, M&As do create value. This is observed by the positive or negative reactions of stock prices during M&A announcements (Isa & Yap, 2004) (Campa, 2004) (Drymbetas & Kyriazopoulos, 2014). Most studies find that cumulative abnormal returns occur in the days following or prior to the announcement date (Andrade et al., 2001).

The parent company of First National Bank of Santa Fe announced it is merging. Strategic Growth Bancorp will merge with Sunflower Financial. Together the two companies hold $4 billion in loans and deposits creating what it calls a “a super-community bank” accoring to reports.

Although the bank should have reorganized prior to the acquisition, the purchase will interfere with normal operations and invite government and regulatory scrutiny (e.g., Dodd-Frank Act). As a result, it is very important for the bank to maintain up-to-date communications with all employees, which will reduce anxiety and fear. That is, employees should never gather employment information from the media and/or unofficially from coworkers (e.g., rumors). Most importantly, the bank must immediately notify and meet with employees (e.g., upper management) that will likely lose their positions due to the acquisition and offer them satisfactory severance packages, which can be paid/available if employees remain until the acquisition is approved

The new entity could leverage the core competency and brand recognition in respective market segment.

Islam, S., Sengupta, P., Ghosh, S., & Basu, S. (2012). The behavioral aspects of mergers and acquisitions: A case study from India. Global Journal of Business Research, 6(3), 103-112.

The paper differs from others as it will provide insight and evaluation into which event during the merger process had the largest effect and identify whether this was the same for both firms, especially since the merger was undertaken in a tough regulatory environment which contains many “hurdles” (). The results of this paper could be attributed to other firms in the industry or, potentially, to other industries with similar regulatory structures.

Issues investigated in this report will be discussed neutrally and objectively. However, there are still numbers of limitations in this report due to many factors. First of all is the biasness of the information collected from the interview of employees in the company. These information may not be neutral and trustworthy; or even misleading. Also, lacking of time is another limitation of this report. Since this consulting report is conducted within a limited time, the consultant cannot address all issues but major points preventing the merger goes smoothly. In addition, financial issues, which can also be a factor

It has more than 3,000 shareholders overall the country, and the composition of the shareholders are the public mainly farmers, cooperatives, unions and businessmen. The paid-up capital of the Bank reached Birr 524.1 Million as of April 30, 2015 and its subscribed capital is Birr 565.2 Million.

In the time of 2008 Global Financial Crises, Barclays Bank is fourth-largest bank in the world, and second-largest bank in the United Kingdom, which has more than 300 years history. The GFC brought limited impact on Barclays’ operation in the crisis early stage. However, few month later (in September 2008), with the crisis spread all over the world, investors lose their confidence on financial institutions. The share price of Barclays dropped more than 40% in only one month. And even worse, now UK Government was raising the required Tier 1 ratio (from 9% to 11%) in order to protect stability of UK financial market. Barclays have to fund at least ￡6.5 from outside capital to meet the requirement. UK Government and Middle

This research paper determines the liability risk after merger or acquisition. Being a CPA firm owner make arrangement look for the different clients and candidates that will expand and create financial benefits and growth significantly. acquisition providing information that can be consider as a solution to the query by doing comparison of corporate strategy of mergers. Factors that lead to merger failures are misgauging strategic fit, cultural clash, communication gap, weak leadership and economic crisis by providing clear vision and putting together professional leadership team that focused management on success and winning the people’s commitment.

Bank of America’s Choice of Comparable Companies. (Tab 1 & 2 - Business Profile & MM Ratios)