Bank mergers and components of risk: An evaluation

Suchismita Mishra, Arun Prakash, Gordon Karels and Manferd Peterson

Journal of Economics and Finance, 2005, vol. 29, issue 1, 85-96

Abstract: The present study empirically examines the contribution of the acquired banks in only the nonconglomerate types of mergers (i.e., banks with banks), where the bulk of the payment is in the form of equity to the acquiring bank and finds overwhelmingly statistically significant evidence that nonconglomerate types of mergers definitely reduce the total as well as the unsystematic risk while having no statistically significant effect on systematic risk. Therefore, it seems that diversification may be a possible motive for bank mergers. Copyright Springer 2005

Date: 2005
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DOI: 10.1007/BF02761544

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