A wave of mergers and amalgamation has become a business reality in Pakistan and over the last five years, 21 financial institutions have been merged / acquired. This has involved a buy-in of foreign banks by the local banks, merger of smaller banks and DFIs, merger of investment banks with commercial banks and so on and so forth.
Recent BIS calculations for a group of large euro-area banks show that, over the period from 2007 to 2014, accumulated retained earnings could have been 75% higher if banks had not paid out dividends. 1 On the other hand, I would not deny that a no-dividends policy could impair a bank’s ability to raise capital.