INFLUENCE OF MERGERS ON PERFORMANCE OF COMMERCIAL BANKS IN KENYA
Abstract
The objective of this study was to establish the influence of mergers on performance of commercial banks in Kenya. The specific objectives were to evaluate the influence of horizontal merger, vertical merger, lateral merger and conglomerate merger on the way commercial banks in Kenya perform. The study was descriptive research design. The target population for the study was the 231 employees of 32 banks that merged in the period 1994 to 2016 in Kenya. The study sampled 67 respondents out of 231. Stratified random sampling techniques were used to draw the sample. The study collected primary data using questionnaires. Secondary data was gathered from existing credible and recognized sources. Validity and reliability of the questionnaire was determined by performing pilot study. Administration of the questionnaire was done by the researcher using self-administration technique. The Quantitative data collected was analyzed by the use of descriptive statistics using SPSS (Version 21) and presented through percentages, means, standard deviations and frequencies. Content analysis was applied in testing data that was qualitative in nature. The study found that horizontal merger, vertical merger, lateral merger and conglomerate merger had a positive influence on performance of commercial banks in Kenya. The study recommended commercial banks managers to be disciplined in order to ensure that they govern the organization in a good way; they should also encourage development of technology. The management of the institution should also focus on improving the competitiveness of the company as well as their financial performance when entering into a merger and not only their improvement in operations and sustaining their failing operations. The study further recommended management of banks to come up with sound strategies to manage assets as well liabilities.
Key Words: Organization Merger, Horizontal, Vertical, Lateral, Conglomerate, Commercial Banks
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DOI: http://dx.doi.org/10.61426/sjbcm.v5i4.910
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