Effect of Acquisition on Financial Performance of Financial Institutions in Rwanda; A Case of I&M Bank Rwanda

Abstract

The objective of this study was to analyse the effect of acquisition on financial performance of financial institutions in Rwanda. Many financial institutions undergone acquisition and their financial performance has been increased significantly, but it is not proven if it is due to acquisition or other factors. In conducting this research, three objectives laid out to assess the effect of strategy change management upon acquisition on financial performance of financial institutions in I&M Bank Rwanda; to investigate the effect of market share management upon acquisition on financial performance of financial institutions in I&M Bank Rwanda and to determine the effect of change in risk management upon acquisition on financial performance of financial institutions in I&M Bank Rwanda. The sample size is 208 selected using purposive sampling. Primary data used for data collection. Data analysed using SPSS. Out of the total 208 questionnaires distributed: 189 questionnaires were completed and returned by the respondents, representing 91.3% of the total. The model's coefficient of determination, denoted as R squared, is 0.511 indicates that 51.1% of the variability in financial Performance of I&M Bank, explained by the strategy change management.  R squared of 0.584 indicates that 58.4% of the variability in financial Performance of I&M Bank explained market share management. The findings revealed that 48.6 % of the financial Performance of I&M Bank explained by degree of risk management. The findings indicated that there is a strong positive correlation (r=0.715, p<0.05) between strategy change management and financial performance. Similarly, a positive and significant correlation (r=0.764, p<0.05) between market share management and financial performance. Furthermore, a sturdy positive correlation (r=0.697, p<0.05) exists between the degree of risk management and financial performance. Board Member at I&M Bank Rwanda are recommended to continue fostering a culture of effective strategy change management. Ensure clear and frequent communication of strategic changes to employees, aligning roles with new strategies, and prioritizing well-planned execution. Key words: acquisition, strategy change management, market share management, risk management, financial performance