IIARD International Institute of Academic Research and Development

IIARD INTERNATIONAL JOURNAL OF BANKING AND FINANCE RESEARCH (IJBFR )

E-ISSN 2695-1886
P-ISSN 2672-4979
VOL. 9 NO. 3 2023
DOI: https://doi.org/10.56201/ijbfr.v9.no3.2023.pg141.153

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Mergers and Acquisitions. An Evaluating Method before and after the Event in the Banking System

Kyriazopoulos Georgios, Kogkouli Aphrodite

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Abstract

The banking industry is a dynamic and important sector of the world economy and plays a key role in financial markets worldwide. Mergers and Acquisitions are an important strategy for corporate firms and banks to achieve growth, efficiency, profitability, create synergies, reduce costs, acquire assets and expand into new markets. Banks, through Mergers and Acquisitions, also aim to increase their capacity and competitiveness. Mergers and Acquisitions are a common phenomenon of the financial sector and especially in the banking system. The purpose of this specific work is the study of Mergers and Acquisitions of Systemic Greek Banks providing a basis for their evaluation methods before and after the event using financial analysis and financial ratios. The literature is reviewed and the case of the acquisition of the Agricultural Bank by Piraeus Bank in 2012 is studied as a significant example for the theoretical framework that we present in this paper. This paper is an attempt to present and evaluate the financial performance of the two systemic Greek banks that involved in the takeover, that is, the bidder bank and the target bank three years before year zero when the takeover took place. So we calculate the financial ratios of the two banks and compare with them. Then we study whether and if there is an improvement of the financial performance of the acquiring bank three years after the completion of the acquisition and we compare the value of financial ratios before and after the acquisition.

keywords:

Banks, Mergers & Acquisitions, Financial Analysis, Profitability, Solvency. Jel Classifications: G21, G33, G34

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References:

Adelaja, A., Nayga R. and Farooq, Z., (1999). "Predicting Mergers and Acquisitions in the
food industry", Agribusiness, Vol.15, (1) p.p.1-23.

Altunba?, Y. & Marqués, D., 2008. "Mergers and Acquisitions and Bank Performance in
Europe: The role of strategic similarities". Journal of Economics and Business, Vol.
60(3), pp.204–222.

Berger, A.N., (1995). "The Profit-Structure Relationship in Banking-Tests of Market-Power
and Efficient-Structure Hypotheses". Journal of Money, Credit and Banking, Vol 27
(2) pp 404-431.

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