The Impact of Merger on SBI’s Financial Performance: A CAMEL Model Analysis

Bank plays a significant role in economy development of any country.Five (05) associates banks and BMB merged with the State Bank of India (SBI) in the year 2017.After merger, SBI has undergone a lot of financial changes which need to be examined.In this contest, the study examines the financial performance of both pre-merger and post-merger of State Bank of India (SBI).To study the comparative financial performance, year 2012 to 2017 are used as pre-merger period and year 2017 to 2022 are used as post-merger period.CAMEL model having capital adequacy, asset quality, liquidity position, management efficiency and earnings efficiency used as performance indicators to measure the financial performance of SBI for pre-and post-merger period.The findings reveal that the merger had a marked impact on SBI's financial performance.Capital adequacy, earnings quality, and liquidity position improved significantly post-merger, indicating strengthened financial resilience and better resource allocation.However, asset quality and management efficiency showed no statistically significant changes, suggesting that these areas were not as directly affected by the merger.Overall, the results underline the transformative potential of strategic mergers in enhancing a bank's financial robustness and operational scale.This analysis contributes to understanding the merger's role in consolidating SBI's market position and provides insights for future mergers in the banking sector.The study's outcomes emphasize the role of mergers in enhancing capital strength and liquidity while indicating potential areas for continued improvement in asset quality and management practices.It was found that overall there is a positive impact of merger on SBI's financial performance but some parameter like Return On Asset (ROA), Return On Equity (ROE) and Profit Per Employee (PPE) shows negative indicator in short term i.e.