Managerial decisions involving bank mergers and acquisitions within the current recession: case study

Alan D. Smith

International Journal of Electronic Finance, 2010, vol. 4, issue 1, 39-63

Abstract: As we are in the midst of the one of the longest recessions in US history, more than ever, companies are doing what they must to barely survive through its end. By virtue of their industries, products (both face-to-face and web-embedded) or policies, mergers and acquisitions strategies, a number of financial institutions are in a better position to weather the current storm. This paper examines the economic and political environment of such firms through a discussion of the Troubled Assets Relief Programme (TARP) and PNC's acquisition of the National Bank. This paper will examine the economic environment, mortgage and toxic assets crisis, and the legal and ethical requirements and considerations associated with mergers, which has been highly and schematically scrutinised by the local citizenry and investors, as National City's assets were devalued by approximately 90% within a one year time frame. Hopefully, by understanding the operational ramifications associated with the bank merger, coupled with corporate goals for sustainable strategies, some understanding of the trade-offs in the decision making process will be gained.

Keywords: acquisitions and mergers; bank M&A; case study; customer relationship management; banking CRM; e-mortgages; P2P lending; peer-to-peer; recession; strategy; TARP programme; electronic finance; e-finance; bank mergers; toxic assets; legal requirements; ethics. (search for similar items in EconPapers)
Date: 2010
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