Bank Merger Analysis

In order to have more understanding on bank merger, our team had done a research on it. We had start with the factors that cause the bank merger. We had found some journal article from researchers like Alessandro Barattieri et al. (2014), Michal Kowalik et al. (2015) for the factor of the bank merger and Mohd Halim Kadri et al. (2009), Vennet (1996), Rhoades(1993), Fadzlan Sufian at el. (2007), Avkiran (1999), Tung-Hao Lee at el. (2013) etc. for the effect of the bank merger.

First and foremost, Alessandro Barattieri et al. (2014) had predicted the extent of merger and acquisitions deals especially about the target economy’s size, industrial structure, investment policies and bilateral transactions costs by the accord model of mergers and

Akhavein at el. (1997) had conducted a study about the effects of megamergers on efficiency and prices evidence from a bank profit function. Bank mergers have the potential to increase profitability through increases in cost efficiency, profit efficiency, or market power in setting prices. In addition, cost ratios and cost efficiency generally found that the potential for cost efficiency improvement was not realized for most mergers. There have been no academic studies of the profit efficiency effects of mergers and very little research on the market power effects of bank mergers. Therefore, the effects of mergers on profitability ratios or equity values may confound changes in profit efficiency with changes in the exercise of market power in setting prices. The effects of equilibrium market structure on prices and profits provide some support for both market power and efficient structure effects of concentration and market share. Both of the profit efficiency and market power effects of mergers are try to identify the conditions that predict when either profit efficiency or market power is likely to be

This study shows the post-mergers have a positively impact on the bank. Investment and advances, Business per employee, Interest income and other incomes had showed a significant improvement in the merger of Bharat Overseas Bank and Indian Overseas Bank. The trending views to the large banking firms are less risky and more efficient compared to small banking firms. However, without certain conditions to be satisfied, the merger cannot prove the beneficial for all the