MERGERS AND ACQUISITIONS AND BANKS' INTERMEDIATION PROCESS IN NIGERIA: A TIME LAG ANALYSIS PERSPECTIVE

Although the majority of studies have found that mergers and acquisitions result to enhanced efficiency of financial intermediation in the Nigerian banking system, none of these studies considered the time lag for anomalies warranting further mergers and acquisitions `among banks in Nigeria. The objective of this study is to ascertain if mergers and acquisitions enhance banks intermediation process and to consider the time lag for banks to remain profitable after mergers and acquisitions. This objective is timely given the acquisitions and re-acquisitions, mergers and re-mergers of banks and financial distress in banks few years after the 2004 consolidation programme that witnessed many mergers and acquisitions in the Nigerian banking industry. The population of the study consists of the entire twenty one deposit money banks in Nigeria and a sample of six banks was selected. The source of data is secondary and data was extracted from the annual reports and accounts of these banks for a period of sixteen years (2000 to 2015). The parametric inferential statistics of simple regression and sequence charts were employed to analyze and to present the results respectively. Our findings show that mergers and acquisitions enhance banks intermediation process and that the time lag for profit resulting from mergers and acquisitions is four (4) years after mergers and acquisitions. Among other recommendations, banks are urged to tighten controls in their operations as well as to grant credit to viable channels in order to sustain profit performance benefits arising from mergers and acquisitions.