An Analysis of the Post-Merger Performance of Punjab National Bank and Canara Bank Using the CAMEL Model

Abstract

Mergers and acquisitions serve as essential strategies for banks to realign their structures, broaden their portfolios, and accelerate growth.
The Indian banking landscape has witnessed substantial transformation in recent years due to rising competition from new entrants,
technological advancements, globalization of financial services, shifting customer preferences, and a focus on providing diverse
offerings at lower costs. These changes have led to strengthened banking systems through consolidation efforts. This research utilizes the
CAMEL framework to evaluate the financial performance and stability of Punjab National Bank and Canara Bank in the post-merger
phase, covering the fiscal years 2019-2020 to 2023-2024. The analysis highlights that Punjab National Bank demonstrated superior
performance compared to Canara Bank, which faced challenges in areas such as capital adequacy, asset quality, and liquidity. Addressing
these critical aspects was imperative for Canara Bank to improve its financial standing. The results highlight a significant difference
between the two banks' performance over the assessed time frame.