THE LONG-TERM IMPACT OF BANK M&As IN EUROPE: AN INTEGRATED APPROACH
Journal Title: European Journal of Business and Social Sciences - Year 2014, Vol 3, Issue 1
Abstract
Financial institutions have dominated M&A activity in Europe in the last decades. This study examines the longterm impact of bank M&As in Europe in a sample of 152 deals over the period 1996-2010, consisting of both withinborder and cross-border deals. In specific, we examine the longterm financial performance of combined entities and we find that profitability increases after two to three years of operation even though initially the M&A activity negatively impacts profitability. Analogous patterns of profitability are found for the sample of domestic deals, whereas cross-border M&As seem to benefit from synergistic gains yet later. When examining other efficiency and loan quality ratios the full sample and domestic deals alone show that merging banks employ expansionary policies soon after consolidating. In contrast, in cross-border M&As managers seem to be more cautious with their loans portfolio in a finding possibly related to enforcing complex integrating policies in the first years after the deal announcement.
Authors and Affiliations
George Kyriazopoulos| (Corresponding Author) Applicant Professor Department of Accounting and Finance Technological Educational Institute of Western Macedonia 50100, Koila, Kozani, Greece Tel: +30-2461068188 E-mail: Kyriazopoulosg@yahoo.com, Evangelos Drymbetas| Associate Professor President of the Department of Economics Democritus University of Thrace University campus 69100, Komotini, Greece Tel: +30-2531039817 E-mail: v.drimpetas@gmail.com
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