ASSESSING THE IMPACT OF MERGERS AND ACQUISITIONS IN RURAL BANKING INDUSTRY IN GHANA: A CASE OF GOMOA COMMUNITY BANK LIMITED

ABSTRACT

Merger is where two or more companies decide to combine their activities and to  organize  a  common  control  of  the  assets.  This  study  focused  on investigating whether mergers are viable options for raising capital for banks to  finance  their  operations,  improve  their  performance  and  expand  their capacity into new areas. The main objective of this study is to assess merger as a  financing  option  to  develop  the  Rural  and  Community  Banking  industry, with  specific  emphasis  on  the  newly  merged  Gomoa  Community  Bank  Ltd. The study took place among staff of the Gomoa Community Bank (a merger product of three Rural Banks within the Gomoa District in the Central Region of Ghana: Gomoa Rural Bank, Apam; Gomoa Ajumako Rural Bank; Afransi and Eastern Gomoa Assin Rural Bank; Gomoa Dominase). Seventy employees submitted their responses for analysis; 50 males and 20 females. The modal age range was 26-35 years. Majority of the employees were diploma and firstdegree holders. 54.29% and 51.43% of respondents indicated that, there are no change  in  advances  to  Gross  Advances  and  earning  asset  to  total  asset  ratio respectively. However, 48.58% of the employee stated that the merger led to increase  in  paid  up  capital.  The  main  challenges  to  the  merger  were  fear  of staff  retrenchment,  membership  of  the  board  and  appointment  of  General Manager. Based on the responses received, it became evident that the quality of  human  resource  at  Gomoa  Community  Bank  Ltd  has  improved. Recommendations: A holistic involvement of stakeholders through education. Gomoa Community Bank Ltd. is to put in place proper policies and strategies to ensure proper external, internal control and regulatory compliance in order to stay in business.