ABSTRACT
In India, the Public Sector Banks (PSBs) play a crucial role in the financial system that promotes financial growth and delivers core banking facilities to customers. With a view to gaining stronger financial recapturing abilities, operational improvement, and managing the surging non-performing assets (NPAs), the government has used mergers as a mechanism in PSBs in India. This paper presents the financial performance of Public Sector Banks, pre- and post-merger periods, using DuPont Analysis with emphasis on the important key performance indicators such as Return on Equity (ROE), Return on Assets (ROA), and efficiency of operational performance. The analysis covers data points between 2008 and 2024 that are subjected to statistical tests, such as the Wilcoxon Signed-Rank Test, to evaluate the difference between pre-post performance.
Based on the analysis, effective integration has been observed with improvement in profitability, operational efficiency, and financial stability in the post-merger period in the State Bank of India (SBI), Bank of Baroda (BOB), and others. Banks such as Punjab National Bank (PNB) and Union Bank of India, on the other hand, are grappling with shrinking profitability, increasing NPAs, and uneven ROE, which indicate the difficulties in handling inherited weaknesses and management processes inefficiencies. The study asserts that despite these facts, mergers could prove beneficial to PSBs, but the success depends on proper post-merger integration, operational rationalization, and adequate governance to achieve long-term financial sustainability.
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