PROBLEMS AND PROSPECTS OF MERGER AND ACQUISITION DECISION IN BANKING SECTOR IN NEPAL

Abstract

The main purpose of this study is to find out the factors that would lead to making
decision regarding going for merger and acquisition among the banks in Nepalese
banking sector. This paper finds out various factors that would affect merger and
acquisition decision in banking sector based upon previous studies, and tries to check
whether these are significant in case of Nepalese banking sector or not. Based upon
the previous studies done by various scholars, nine factors along with their
corresponding hypothesis have been used for study. The nine factors are: emphasis
on increasing income, emphasis on increasing sales of services, emphasis on
financial diversification, emphasis on cost efficiency, emphasis on obtaining stronger
position in market, emphasis on better branding, emphasis on achieving security,
emphasis on fulfilling regulations requirement from regulatory authorities and
emphasis on fulfilling capital requirement.