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Does Bank Merging Affect Its Loaning Services
#1
Question 
Over the last couple of years back, the banking sector in Nigeria had a critical situation which led to the merging of several banks to meet up with the directives of operations set out my the Central Bank of Nigeria (CBN).

Now, it's a known fact that no two banks operates the same banking policies, which brings me to the question of what happens to the loaning system set out my each of the banks that merged into one cooperation, and also does it in any way affect the customers who already have a loan contract with the banks?
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#2
I think this is something that you have to see what kind of policies your bank adopts as to how it will affect you. It may not make a great deal of difference but then again, it could. It really just depends on how the new bank sees things and how they are going to bank. This is a question better answered by the new bank.
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#3
Mostly in merging two same companies, one should respect the other. For simplified explanations even the word "Merging" seem to be equal they are not. One company is bigger than the other, the one who is being absorbed by the larger company should be the one to follow its existing policies/If there is changes it will be minimal for the absorbing bank. To respect each bank policies they are taking in the considerations of not changing each existing contract with their present clients. If a new Policies has been made by the merged banks, the upcoming clients will be the one to have them follow.
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#4
Last year two major banks merged in my country and the terms on loans for existing customers did NOT change, because they already had established contracts. If the banks had changed anything, clients could have sued them.

The merging process will take 2 years to finalize. It seems kind of long.
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#5
I think merging of two major banks will not affect your existing loan since you avail that loan when they are independent and not string attached to each other. It will only those who will get their loan when the bank is already merge, but I think the policy will become very fair for the new loaner.
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#6
In general, mergers and acquisitions are not likely to have impact on existing loan contracts. There could be changes in the place and manner of payment but the essentials of the contract are legally binding and should be respected by the new management. The terms of future loan contracts, however, will be dependent on the policies of the new management. They may decide to offer the same loan products provided by the acquired bank or stop the loan's implementation in favor of other loan products. It can get complicated because there are varying reasons for business consolidations. Many of these are happening behind the scenes like having common majority investors in two banks after recent stock acquisitions. The more important thing is that changes in bank policies are communicated to all stakeholders, including customers.
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#7
     Merger and Acquisitions or M&A is a bank terminology that we might really find a bit alarming most specially if you are one of the clients involve so to speak. Though, nearly every middle-market bank in the industry is looking to either acquire another bank or be acquired, and it’s likely that yours is no exception. Many banks see an acquisition or merger as a chance to expand their reach or scale up operations quicker. Yet, a bank acquisition is not without its drawbacks as well, particularly for the unprepared banking executives.

    There might be several good reasons for this M&A like quick institutional scale up, a better efficiency ratio, business gaps filled and maybe a talent and team upgrade. However, let try to focus more on the 'dangers' of such act.

> Customer Impact. Customers often respond very emotionally to a bank acquisition – so it’s essential that you manage customer perception with regular, careful communication.
> Poor Culture Fit. Failure to assess cultural fit (not just financial fit) is one reason why many bank mergers ultimately fail. Throughout the merger and acquisition process, be sure to thoroughly communicate and double-check that employees are adapting to the change.
> Failed Commitment. Execution risk is another major danger in bank mergers. In some cases, banking executives don’t commit enough time and resources into bringing the two banking platforms together – and the resulting impact on their customers causes the newly merged bank to fail completely.
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#8
The effect of new policy takes time before it will be implemented. Even if the banks have merged they still need to take good care of their old clients they won't be affected by some changes. The new clients are the one to make adjustments in case the merging banks decided for new policies in loaning services.
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#9
(01-14-2018, 08:09 PM)chikatilo Wrote: Last year two major banks merged in my country and the terms on loans for existing customers did NOT change, because they already had established contracts. If the banks had changed anything, clients could have sued them.

The merging process will take 2 years to finalize. It seems kind of long.

@chikatilo I think this makes a lot of sense to me now from your comment. There is an already existing contract between the bank customer with the bank with regards to the loan given, merging of the banks doesn't change the terms of an already finalized contract, so therefore anything that goes contrary to the loan contract can be sued to law court and it's almost 99% certain that the bank would be found guilty and be forced to pay more damages.
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#10
I don't know what is the effect if the two company merge, I think it is better if the two company merged because for me they merge for our own good or for there clients good.
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