The goal of this master paper is to explain in more details the banking sector, integration processes occuring in Croatia and the world and the effects of such types of transactions on the banking sector and commercial bank operations. The paper begins with the theorietical framework of the banking sector and commercial banks, their functions and types according to certain parameters. Subsequently, the paper is based on explaining the role of banks in the financial system at all. Banks are very important segment of the financial system because the Croatian banking system is a bank-centric orientation. That is because the main source of financing for businesses and households are bank loans. This chapter is followed by an analysis of trends in the banking sector in the Republic of Croatia and the world. Third chapter include theoretical explanation of fusions and acqusitions as integration processes. The last chapter analyzes the impact of integration processes on the banking sector as a whole and the financial reporting arrangements after transactions have taken place. The integration processes of commercial banks lead to changes in the value of the total assets of banks which is very sensitive to changes that are taking place in the market. Major integration processes result in a significant increase in the value of total assets. In addition, changes are evident in the market share of individual bank categories and the capital adequacy ratio. Banks, like other companies, are requiered to prepare financial statements. The main difference in the financial statements between the real and financial sectors is the possitions in the statements. Following the mergers and acqusitions of the banks, the structure of the financial statements of the banks is changed in view of the obligation of consolidation of the reports by the acquirer bank.