Do M&As in the EU banking industry lead to an increase in performance?

Elena Beccalli and Pascal Frantz
Additional contact information
Elena Beccalli: University of Macerata
Pascal Frantz: London School of Economics

No 50-2008, Working Papers from Macerata University, Department of Finance and Economic Sciences

Abstract:

This paper investigates whether M&A operations influence the performance of banks. Using a sample of 714 deals involving EU acquirers and targets located throughout the world over the period 1991-2005, we investigate whether M&A operations are associated with improved performance (measured using both standard accounting ratios and cost and alternative profit X-efficiency measures). Despite the extensive and ongoing consolidation process in the banking industry, we find that M&A operations are associated with a slight deterioration in return on equity, cash flow return and profit efficiency and with a marked improvement in cost efficiency. Hence, the improvements in cost efficiency appear to be transferred to bank clients. These changes in performance are directly attributable to the M&A operations, and would not have occurred in their absence. Moreover, these changes exhibit a particularly negative trend for cross-border deals to testify the importance of geographical relatedness in order to achieve better post-M&A performance. The environmental and bank-characteristics that make a deal successful or unsuccessful are finally identified.

JEL-codes: O1 O11 (search for similar items in EconPapers)
Date: 2008-12, Revised 2009-12
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published as: E. Beccalli, P. Frantz: 2009, 'M&A operations and performance in banking', Journal of Financial Services Research, n. 36(2), pp. 203-226.

Downloads: (external link)
http://www.unimc.it/dief/wpaper/wpaper00050/filePaper (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.unimc.it/dief/wpaper/wpaper00050/filePaper [301 Moved Permanently]--> https://www.unimc.it/dief/wpaper/wpaper00050/filePaper [302 Found]--> http://www2.unimc.it/dief/wpaper/wpaper00050/filePaper)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mcr:wpdief:wpaper00050

Access Statistics for this paper

More papers in Working Papers from Macerata University, Department of Finance and Economic Sciences Contact information at EDIRC.
Bibliographic data for series maintained by Silvana Tartufoli ().