Effect of Managerial Competence on Value-Based Financial Performance of Banks

Abstract

This study investigates the connections between managerial competency MC) and value- based financial performance (EVA, MVA and CVA) of acquirer banks listed on the Ghana Stock Exchange (hereafter: GSE). Correlational research design was employed for the study. Four banks: Ecobank Ghana Ltd, Access Bank Ghana Ltd, Societe Generale Ghana Limited and GCB Bank Limited were chosen for the study. Multiple regression model using Statistical Package for Social Sciences (SPSS) was employed for the data analyses. The findings suggest that MC has a positive and significant effect on value-based financial performance proxied by economic value added (EVA), market value added (MVA) and cash value added (CVA). The MCs required for merger and acquisition success in the banking sector comprised of Leadership Skills, Technical Skills, Fraud Risk Management Skills and Customer Value Management Skills. The study deepens literature on the requisite MC (intra-personal skills, interpersonal skills, leadership skills, technical/business skills, fraud risk management skills, customer value management skills) for merger and acquisition success. Should there be increased shareholder value after a merger or acquisition, managerial competence plays a cardinal role. Traditionally, this value-based model provides guidelines or framework for staff in management evaluation for selection, development and performance management. these skills can be considered as the basis for management development programs as the skills needed to be effective can be developed in adults. the study was limited to only four acquirer banks listed on GSE, further study should be conducted on all listed banks on GSE to test the validity and operability of the value-based model of MC.