THE IMPACT OF THE MERGER WITH SYNDICATE BANK ON CANARA BANK'S PROFITABILITY

Banking sector serve as the backbone of an Indian economy as it facilitates channelizing the surplus public funds into the most productive channels, inculcating saving habits and accelerating the rate of capital formation. The Indian banking industry has witnessedthe paradigm shift from traditional functioning of banks’ lending and borrowing to the modern banking which includes internet banking, mobile banking, micro-banking, insurance and locker facilities to strengthen their financial system. In present scenario, the Indian banking industry has suffered many challenges in relation to their normal functioning of business such as booming of net loss, mounting of NPA, proliferating operating costs, erosion of net worth, intensifying unhealthy competition between public and private sector banks that necessities the Government of India announced Mergers and Acquisition to revive the performance of Indian banking industry. Mergers and Acquisitions as a phenomenon are implemented to strengthen the banking system, embraceglobalization, improve healthy competition, exploit economies of scale, adopt advanced technologies, raise efficiency and improve profitability. The main objective of this study to examine the impact of Syndicate Bank merger on profitability of Canara Bank. The study period covers four years the pre and post-merger of banks. Theyear of merger as a base year and hence, it is excluded from the evaluation to have consistency in evaluation of pre and post-merger performance of acquirer banks. The study has taken into consideration four variables, i.e., deposits, advances, business, and net profit for the comparative analysis in the pre and post- merger.