Value Creation at the Ongoing Consolidation of the European Banking Markets

Beitel, Patrick; Schiereck, Dirk

doi:10.2139/ssrn.302645

Cited by 53 publications

(57 citation statements)

References 78 publications

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“…However, there are observed significant quantitatively differences between the studies that analyse European M&As, mainly due to the period under examination or the number of firms that were included in the sample used. The first studies (Cybo-Ottone andMurgia, 2000, Bietel andSchiereck, 2001) report relatively higher abnormal returns, closer to those observed in US studies, while the latest studies (Ismail andDavidson, 2004, Campa andHernando, 2006) present more conservative results, still positive and statistically significant though, with the difference attributed to the different structure of the utilised samples.…”

Section: (B)target Bankssupporting

confidence: 58%

“…Finally, there is limited and inconclusive evidence on the benefits of domestic versus cross-border expansion with Campa and Hernando (2006), Lepetit et al (2004), Beitel and Schiereck (2001) and Cybo-Ottone and Murgia (2000) presenting results…”

Section: (B)target Banksmentioning

confidence: 99%

“…Campa and Hernando, 2006, Ismail and Davidson, 2005, Lepetit et al, 2004, Altunbas and Ibanez, 2004, Beitel et al, 2004, Beitel and Schiereck, 2001, Cybo-Ottone and Murgia, 2000. 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Source: Thomson Financial Securities Data Company.…”

Section: Introductionmentioning

confidence: 99%

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Revisiting the merger and acquisition performance of European banks

Asimakopoulos¹,

Athanasoglou²

2013

International Review of Financial Analysis

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The study examines the value creation of Merger and Acquisition (M&A) deals in European Banking from 1990Banking from -2004. This is performed, first, by examining the stock price reaction of banks to the announcement of M&A deals and, second, by analysing the determinants of this reaction. The findings provide evidence of value creation in European banks as the shareholders of the targets have benefited from positive and (statistically) significant abnormal returns while those of the acquirers earn small negative but non-significant abnormal returns. In the case of the shareholders of the acquirers, domestic M&As and especially those between banks with shares listed on the stock market, seem to be more beneficial compared to cross-border ones or those when the target is unlisted. Shareholders of the targets earn in all cases positive abnormal returns. Finally, although the link between abnormal returns and fundamental characteristics of the banks is rather weak, it appears that the acquisition of smaller, less efficient banks generating more diversified income are more value creating, while acquisition of less efficient, liquid and characterised by higher credit risk banks is not a value creating option.

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Section: (B)target Bankssupporting

confidence: 58%

Section: (B)target Banksmentioning

confidence: 99%

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Revisiting the merger and acquisition performance of European banks

Asimakopoulos¹,

Athanasoglou²

2013

International Review of Financial Analysis

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“…Moreover, these barriers are, especially, prevalent in commercial banking where access to information, trust and familiarity, i.e. factors that are crucial in the formation of banking relationships, are important considerations (Barros et al, 2005;Beitel & Schiereck, 2001;Kwok & Tadesse, 2006). Rugman and Verbeke (1998), Buckley and Casson (1998), Alavarez-Gil et al (2003), Westney (2006), Friedman (2007, etc., fit comfortably within the behavioural school but they take a different perspective on internationalisation.…”

Section: Literature Reviewmentioning

confidence: 99%

An Examination of Cross-Border Strategies in Banking

Howcroft¹,

ul-Haq²,

Carr³

2011

Bank Strategy, Governance and Ratings

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The paper examines the process of bank internationalisation and explores how banks become international organisations and what this involves. It also makes an assessment of the significance of their international operations and determines whether banks are truly global organisations. The empirical data are based on the 60 largest banks in the world and content analysis is used to categorise the information into the eight international strategies of Atamer, Calori, Gustavsson, and Menguzzato-Boulard [Internationalisation strategies. In R. Calori, T. Atamer, & P. Nunes (Eds.), The dynamics of international competition -from practice to theory, strategy series (pp. 162 -206). London: Sage (2000)] and Bryan, Fraser, Oppenheim, and Rall [Race for the World strategies to build a great global firm. Boston, MA: Harvard Business School Press (1999)]. The findings suggest that the majority of banks focus on countries or geographic regions in which they have some sort of cultural or economic affinity. Moreover, apart from a relatively small number of very large banks, they are international rather than truly global organisations.

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“…This may explain the more favorable U.S. evidence. 33 Beitel and Schiereck (2001), analyzing mergers between European financial institutions between 1988 and 2000, show that domestic (intra-state) mergers on average have significantly positive combined (bidder plus target) announcement effects, but weaker so in the last few years (1988)(1989)(1990)(1991)(1992)(1993)(1994)(1995)(1996)(1997)(1998)(1999)(2000). They also found that diversifying domestic mergers (particularly between banks and insurers) had on average a positive value impact.…”

Section: Recent Evidencementioning

confidence: 99%

The Competitive Challenge in Banking

Boot

Schmeits

2005

SSRN Journal

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The increasingly competitive environment poses challenges to bankers. This paper emphasizes relationship banking as a prime source of the banks' comparative advantage. The proliferation of transaction-oriented banking (trading and financial market activities) does however seriously challenge relationship banking.Competition from financial markets may well destabilize (traditional) durable relationships. However, we argue that, contrary to what many believe, banks may optimally respond by increasing relationship-specific investments. These observations echo the insights generated by fundamental research in the area of financial intermediation, and seem consistent with banks' recent strategic choices. We subsequently analyze the implications for the competitive positioning of banks. To this end, we discuss the rationales and empirical evidence regarding the recent consolidation and conglomeration trend in the financial sector, and the implications for both the industrial structure and the optimal internal organization of banks. We also discuss the potential disaggregation of the value chain via joint ventures or outsourcing.JEL Classification: G20, G21

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Value Creation at the Ongoing Consolidation of the European Banking Markets

Cited by 53 publications

References 78 publications

Revisiting the merger and acquisition performance of European banks

Revisiting the merger and acquisition performance of European banks

An Examination of Cross-Border Strategies in Banking

The Competitive Challenge in Banking

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