Financial Performance of Banking Sector in India: A Pre- and Post-Merger Analysis of Public Sector Bank Consolidation

This study provides statistically grounded evidence that the merger of Andhra Bank and Corporation Bank with Union Bank of India has significantly improved the bank's financial performance across profitability and asset quality dimensions. Net Profit Margin, ROA, ROE, and Net NPA improvements are all statistically significant at the 5% level, permitting rejection of the null hypothesis for these core indicators. The simultaneous rise in the Cost-to-Income Ratio — equally significant at the 1% level — highlights that efficiency improvements are lagged and continue to be a priority area. Leverage and overall liquidity remained stable, reflecting sound risk management during the integration. Policymakers can draw cautious optimism from these findings: bank consolidation, when executed with adequate capital support and regulatory scaffolding, can deliver meaningful financial improvement for PSBs. However, long-term success requires continued focus on operational efficiency, cost rationalisation, and sustained NPA resolution.

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