Sum of Squares df Mean Square F Sig 1 Regression 13992 1 13992 0721 405 b

Sum of squares df mean square f sig 1 regression

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Sum of Squares df Mean Square F Sig. 1 Regression 13.992 1 13.992 0.721 .405 b Residual 427.176 22 19.417 Total 441.169 23 a. Dependent Variable: Performance b. Predictors: (Constant), CAR Coefficients Model Unstandardized Coefficients Standardized Coefficients t Sig. B Std. Error Beta 1 (Constant) 4.002 1.389 2.882 .009 CAR -.034 0.040 -.178 -.849 .405 a. Dependent Variable: Financial Performance Regression results of post-merger ANOVA indicated a significance of F (2, 24) = 0.72, p = 0.405. An R2 of 0.032 indicated that only3.2% of the variations in performance are explained by capital adequacy ratio after the merger or acquisition event. The overall model is shown on table 4.17. A coefficient of -1.78 shows a negative correlation and
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39 implies that when there is an increase in performance then there is a decrease in capital adequacy ratio 4.6. Chapter Summary Return on assets in this study was used to measure asset management of commercial banks in Kenya. The results revealed a positive relationship between return on assets and performance r (24) =.536, p < 0.01 . Regression results indicated that ROA explained 0.1% of the variance (R2=.01, F (2, 24) = 0.02, p< 0.01 ). This indicated that return on assets as a determinant of performance of Kenyan commercial banks positively influenced mergers and acquisitions. The more the mergers or acquisition institutions acquire assets, the better they perform. Return on equity was used to measure the effects of mergers and acquisitions on shareholder’s value of commercial banks in Kenya. The findingsrevealed a positive relationship between return on equity and performance, r (24) = .041, p<0.05 . Results of the regression indicated that ROE is explained by 0.04% of the variance (R2 = .004, F (2, 24) = 0.133, p<.05). This implied that institutions that had either merged or undergone acquisition with higher shareholder’s value also had a higher financial performance and hence a higher market share. Capital adequacy ratio was used to measure the effect of mergers and acquisitions on financial stability of commercial banks in Kenya. There were inconsistent results regarding this variable. Findings showed a significant negative correlation of r (24) =- 0.178, p<0.01). Regression results indicated that CAR was explained by only 0.07% of the variance (R2=.007, F (2, 24) = 0.23, p<0.01). This means that the higher the capital adequacy ratio the institution has the lower the lower the financial performance of the institution.
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40 CHAPTER 5 5.0. DISCUSSION, CONCLUSIONS AND RECOMMENDATIONS 5.1. Introduction This chapter presents the summary of the study, discussion of the results and makes conclusions from the findings. Recommendations for improvement and further studies have also been discussed. 5.2. Summary The general objective of this study was to determine the effects of mergers and acquisitions on the financial performance of commercial banks in Kenya. The study was guided by the following specific objectives: to determine the effect of shareholder’s value on financial performance of merged commercial banks in Kenya, to determine the effect of asset management on financial performance of merged commercial banks in Kenya
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