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- Title
THE IMPACT OF BANK MERGERS AND ACQUISITIONS ON THE BANK PERFORMANCE AND RISK TAKING BEHAVIOUR.
- Authors
Asandului, Mircea; Cazan, Sabina Andreea; Capraru, Bogdan; Ihnatov, Iulian
- Abstract
This study assesses the main implications of M&As on the bank performance and risk taking behaviour using a panel dataset covering 156 banks from 17 countries of Central and Eastern Europe during the period of 2005-2012. In the latest years, the trend of completed M&As has risen significantly and is considered to be an important instrument of growth and power of the financial markets. The authors of this article found robust evidence that there is a negative impact of M&As on profitability. The M&As are drivers for credit risk reduction, as they negatively impact the lending growth. The credit risk taking is augmented in the post-merger period if the banks are state owned, have a weak mechanism of internal governance and are a part of banking system that faces supervision quality problems. The post-M&A performance is not affected by the ownership or governance, but is enhanced by a lax supervision framework.
- Subjects
EUROPE; BANK mergers; FINANCIAL performance; RISK management in business; PROFITABILITY; CREDIT risk
- Publication
Transformations in Business & Economics, 2016, Vol 15, Issue 3C, p580
- ISSN
1648-4460
- Publication type
Article