MERGER EVALUATION METHODOLOGYThis study is carried out using a before and after approach to evaluate the impact of merger. Accordingly, we tried to analyze the profitability, total income, branch efficiency and stock holding pattern. The pre-merger analysis was carried out for the financial year 1999-2000, while the post-merger analysis was carried out for the financial year. 2000-2001. The ratios have been broadly classified under the following headings: PROFITABILITY Profit is the ultimate goal of any business. And the future of a company depends on its level of profitability. Here, the Spread-Burden model was adopted to measure the profitability of banks. Where Spread refers to the difference between interest income and interest expense, Burden implies the difference between non-interest income and non-interest expenses and Profit Margin refers to the profit made by the bank before making provisions and unforeseen events. Pre-Merger Element Post-MergerSpread/Total Income -0.128 -0.081Burden/Total Income 0.344 0.350Profit Margin/Total Income 0.246 0.355Table 1: Profitability Ratios for HDFC- Times BankIt can be observed that the above three ratios showed a positive improvement, comparing the pre-merger and post-merger scenario. HDFC was beneficial with higher non-interest income, although interest income declined. Profit margin also increased significantly, creating synergy between bank mergers. Contingencies/Total Income 0...... middle of paper ......especially at junior levels. Non-private Indian banks will benefit greatly from productivity improvements, such as re-engineering institutions' knowledge processes, better use of technology and building industry-level utilities. CriticismsAlthough we have analyzed mergers in detail and found more positives than negatives, many people argue that mergers, which are supposed to be aimed at generating profits for an organization, can also have many harmful effects. For example, a merger between a large-scale bank and a small-scale bank may prove beneficial for the large-scale bank, but it will not prove beneficial for the small banks, because the big fish will eat the small fish and if these types of mergers continue to increase, the Indian banking sector will slowly transform into an oligopolistic market..