An Investigation of the Economic Theory of Bank Mergers PDF Download

Author: Brenda Grunder
Publisher:
ISBN:
Category :
Languages : en
Pages : 82

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Author: Rami Saleh
Publisher: GRIN Verlag
ISBN: 3656426880
Category : Business & Economics
Languages : en
Pages : 97

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Doctoral Thesis / Dissertation from the year 2009 in the subject Business economics - Banking, Stock Exchanges, Insurance, Accounting, grade: A, , language: English, abstract: A study of the impact of mergers and acquisitions on the economic profitability among Banks in Lebanon

Author: Gary Dymski
Publisher: Routledge
ISBN: 1315292432
Category : Business & Economics
Languages : en
Pages : 356

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This far-reaching study shows that operating efficiencies are not what are driving today's unrelenting bank merger mania. It suggests that bank mergers and consolidation may have effects that are contrary to consumer and non-financial business interests, such as lower rates of interest, increasing fees, and tighter credit constraints. Dymski recommends several new policies to apply to the evaluation of prospective mergers.

Author: Bruce L. Benson
Publisher:
ISBN:
Category : Bank holding companies
Languages : en
Pages : 70

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Author: Yakov Amihud
Publisher: Springer Science & Business Media
ISBN: 9780792399759
Category : Business & Economics
Languages : en
Pages : 268

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As the financial services industry becomes increasingly international, the more narrowly defined and historically protected national financial markets become less significant. Consequently, financial institutions must achieve a critical size in order to compete. Bank Mergers & Acquisitions analyses the major issues associated with the large wave of bank mergers and acquisitions in the 1990's. While the effects of these changes have been most pronounced in the commercial banking industry, they also have a profound impact on other financial institutions: insurance firms, investment banks, and institutional investors. Bank Mergers & Acquisitions is divided into three major sections: A general and theoretical background to the topic of bank mergers and acquisitions; the effect of bank mergers on efficiency and shareholders' wealth; and regulatory and legal issues associated with mergers of financial institutions. It brings together contributions from leading scholars and high-level practitioners in economics, finance and law.

Author: Robert DeYoung
Publisher:
ISBN:
Category : Bank mergers
Languages : en
Pages : 44

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Author: Douglas D. Evanoff
Publisher:
ISBN:
Category :
Languages : en
Pages : 36

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The recent banking literature has evaluated the impact of mergers on the efficiency of the merging parties [e.g., Rhoades (1993), Shaffer (1993), Fixler and Zieschang (1993)]. Similarly, there has been analysis of the impact of eliminating bank entry restrictions on the average performance of banks [Jayaratne and Strahan (1998)]. The evidence suggests that acquiring banks are typically more efficient than are acquired banks, resulting in the potential for the new combined organization to be more efficient and, therefore, for the merger to be welfare enhancing. The evidence also suggests, however, that these potential gains are often not realized. This has led some to question the benefits resulting from the recent increase in bank merger activity. We take a somewhat more comprehensive and micro-oriented approach and evaluate the impact of actual and potential competition resulting from market-entry mergers and reductions in entry barriers on bank efficiency. In particular, in addition to the efficiency gains realized by the parties involved in a bank merger, economic theory argues that additional efficiency gains should result from the impact of the merger on the degree of local market competition. We therefore examine the impact of increased competition resulting from mergers and acquisitions on the productive efficiency of incumbent banks. Our findings are consistent with economic theory: As competition increases as a result of entry or the creation of a more viable local competitor, the incumbent banks respond by increasing their level of cost efficiency. We find this efficiency increase to be in addition to any efficiency gains resulting from increases in potential competition occurring with the initial elimination of certain entry barriers. Thus, consistent with economic theory, new entrants and reductions in entry barriers lead incumbent firms to increase their productive efficiency to enable them to be viable in the more competitive environment. Studies evaluating the impact of bank mergers on the efficiency of the combining parties alone may be overlooking the most significant welfare enhancing aspect of merger activity. We do not find evidence of profit efficiency gains. In fact, the mergers are associated with decreases in profit efficiency; perhaps indicating that revenues may also be competed away from incumbents as a result of mergers.

Author: Benton E. Gup
Publisher: Springer Science & Business Media
ISBN: 9400925247
Category : Business & Economics
Languages : en
Pages : 242

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Historians of our financial system will record this as an age of deregulation and bank mergers. Deregulation, a cornerstone of President Reagan's Administration, resulted in federal and state legislation that contributed to increased competition for financial services and increased merger activity. During the 1981-1986 period, there were 2,139 mergers in banking and finance, accounting for 16 percent of total merger activity.l More mergers occurred in banking and finance than in any other industry. Because of these bank mergers, there are vast amounts of data avail able for scholarly research. This book presents some results of that research which will be of interest to academics, bankers, investors, legislators, and regulators. The book consists of ten articles, and it is divided into three parts. Part 1: National and Regional Bank Mergers gives a broad perspective of merger activity. The first article by Peter S. Rose compared the growth of bank holding companies that merged with those that did not merge. One conclusion of his study was that banks planning mergers tended to be aggressively managed and were often beset by problems, such as low profitability or declining loan quality. Mergers were one solution to their problems. But he found no solid evidence that mergers resulted in greater profitability or reduced risk. He also observed that acquiring banks did not seem to grow faster than those choosing not to merge.

Author: Ashford Maharaj
Publisher: Universal-Publishers
ISBN: 1581122276
Category : Business & Economics
Languages : en
Pages : 256

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This study focused on factors that have positively influenced the model of economic success for commercial and thrift megabanks involved in merger and acquisition activities for the period 1990 - 1997, a period characterized by an unprecedented flurry of merger and acquisition activities among megabanks in the United States. This study identified and measured key independent variables for identifiable mergers and acquisitions among megabanks and tested the extent to which, such independent variables influenced abnormal returns for underlying equities traded in capital markets. This study also tested the hypothesis that megabanks are attracting significantly higher acquisition premiums than the relatively smaller banks. The data collected and the conclusions drawn were based on the logic of a hypothetico-deductive paradigm, which essentially utilized the techniques of the standard event study methodology, and included parameters of the conventional Capital Asset Pricing Model. This study was based on a scientifically determined sample of over 200 banks in the small bank category and between 68 and 86 banks grouped under the megabank category. The findings revealed that megebank acquirers realized negative abnormal returns and that megabank acquirees did not realize economic value significantly greater than acquirers for those banks that integrated on a merger-of-equals basis. The findings also showed that megabanks seemed more willing to pay higher premiums for the right to integrate with other megabanks vis-a-vis the right to integrate with small banks.

Author: Simon H. Kwan
Publisher:
ISBN:
Category : Bank mergers
Languages : en
Pages : 26

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