An event study analysis of international ventures between banks and insurance firms

Sotiris K. Staikouras

Journal of International Financial Markets, Institutions and Money, 2009, vol. 19, issue 4, 675-691

Abstract: The current study examines the effects on shareholders wealth as a result of the bank-insurance interface. Using a global sample of financial intermediaries and an event-study framework the findings reveal significant abnormal returns surrounding the announcement of bank-insurance ventures. A control sample using financial institutions that do not pursue bank-insurance deals shows negative abnormal returns with much higher magnitude in absolute terms. When the sample is separated on the basis of the bidder's nature, then bank-bidders earn significant positive returns, while the insurance-bidders experience significant losses. The analysis further unveils either statistically significant negative returns or insignificant values for bank-insurance divestments. Finally, profitability, size and functional diversification are all found significant in determining abnormal returns over various intervals.

Keywords: Bank-insurance; interface; Divestments; Financial; conglomerates; Event; study; Abnormal; returns (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:intfin:v:19:y:2009:i:4:p:675-691

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