Pre and Post–Merger Financial Performance Analysis of Commercial Banks in Nepal


  • Pitri Raj Adhikari Tribhuvan University



Merger, commercial banks, financial performance, ratio analysis


Purpose: This study attempts to examine the effect of merger on the financial performance of Nepalese commercial banks.

Methodology: This paper employs a descriptive and causal comparative research design to examine the financial performance of commercial banks involved in six merger deals as of mid-July 2022, with a sample of four merger deals completed before mid-July 2018. Mean, standard deviation, paired sample t-test, Pearson correlation, regression analysis, and the VIF test, are utilized for data analysis. Financial performance is evaluated using nine key ratios (EPS, NWPS, P/E ratio, CD ratio, CAR, NPL ratio, ROA, ROE, and NPM). Secondary data covering six years (2010 to 2019), excluding the specific merging year, are analyzed.

Findings: The analysis of pre- and post-merger financial performance in the sample commercial banks revealed statistically significant differences in EPS, NWPS, ROA, and NPM. Positive correlations were observed between the pre- and post-merger periods for EPS, NWPS, CD ratio, CAR, NPL ratio, ROA, ROE, and NPM, excluding the P/E ratio. The merger proved beneficial for Nepalese commercial banks, leading to improved profitability in terms of EPS, ROA, and NPM in the post-merger phase. However, factors like CD ratio, CAR, and NPL ratio, regulated by the NRB, showed no significant changes post-merger. Although banks experienced increased P/E ratio and ROE, the impact was deemed insignificant. Notably, CAR had the most significant impact on both pre- and post-merger ROA.

Implication: The results derived from the study are relevant to managers for future merger decisions and can be used for the selection of a suitable partner for future merger activities.

Value: It contributes to a better understanding of the overall merger scenario in Nepalese banking sector, as well as the relationship between certain restrictions and merger.


Download data is not yet available.

Author Biography

Pitri Raj Adhikari, Tribhuvan University

Assistant Professor




How to Cite

Adhikari, P. R. (2023). Pre and Post–Merger Financial Performance Analysis of Commercial Banks in Nepal. The International Research Journal of Management Science, 8(1), 95–110.