Advanced Search
MyIDEAS: Login to save this article or follow this journal

The Cost Implications of Hypothetical Bank Mergers in Italy


Author Info

  • Altunbas, Yener

    (Bangor Business School, Univeristy of Wales)

  • Molyneux, Philip

    (Bangor Business School Univeristy of Wales)

  • Thornton, John

    (Bangor Business School, Univeristy of Wales)


This paper examines the evidence of cost efficiencies resulting from hypothetical mergers in the Italian banking market. The approach adopted is similar to that of Shaffer (1992, 1993) where bank mergers are simulated and then total costs are calculated using the hybrid translog methodology for the hypothetically merged banks. These costs are then compared with the sum of the original predicted total costs for the individual banks. The results generally indicate that opportunities for cost savings seem to be rather limited in the Italian market. If we consider bank mergers between the largest twenty banks, hypothetical cost savings can generally be noticed for banks that merge with Monte dei Paschi di Siena, Credito Italiano, Cariplo, Banco di Santo Spirito and Cassa di Risparmio di Verona-Vicenza-Belluno. Specifically, the pairs Cassa di Risparmio di Verona-Vicenza- Belluno and Credito Italiano, Credito Italiano and Banco di Santo Spirito, Monte dei Paschi di Siena and Credito Italiano, result in small cost reductions. The vast majority of hypothetical mergers, however, show an increase in predicted costs. For exampie, the largest banks such as Istituto Bancario San Paolo di Torino, Banca Nazionale del Lavoro, Banca Commerciale Italiana, Banco di Napoli, Banca di Roma and Banco di Sicilia are not cost efficient and their specific pairs raise costs e.g. Istituto Bancario San Paolo di Torino and Banca Nazionale del Lavoro (10.19%), Banca Nazionale dei Lavoro and Monte Dei Paschi di Siena (2.13%), Banco di Napoli and Istituto Bancario San Paolo di Torino (10.40%), Banca Commerciale Italiana and Banco di Sicilia (3.25%), Banca Popolare di Milano and Banca Nazionale del Lavoro (3.42%).

Download Info

To our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.

Bibliographic Info

Article provided by Camera di Commercio di Genova in its journal Economia Internazionale / International Economics.

Volume (Year): 49 (2006)
Issue (Month): 1 ()
Pages: 1-18

as in new window
Handle: RePEc:ris:ecoint:0379

Contact details of provider:
Postal: Via Garibaldi 4, 16124 Genova, Italy
Phone: +39 010 27041
Fax: +39 010 2704222
Web page:
More information through EDIRC

Related research



No references listed on IDEAS
You can help add them by filling out this form.


Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Ugo Albertazzi & Leonardo Gambacorta, 2006. "Bank profitability and the business cycle," Temi di discussione (Economic working papers), Bank of Italy, Economic Research and International Relations Area 601, Bank of Italy, Economic Research and International Relations Area.
  2. Albertazzi, Ugo & Gambacorta, Leonardo, 2010. "Bank profitability and taxation," Journal of Banking & Finance, Elsevier, Elsevier, vol. 34(11), pages 2801-2810, November.
  3. Resti, Andrea, 1998. "Regulation Can Foster Mergers, Can Mergers Foster Efficiency? The Italian Case," Journal of Economics and Business, Elsevier, Elsevier, vol. 50(2), pages 157-169, March.


This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.


Access and download statistics


When requesting a correction, please mention this item's handle: RePEc:ris:ecoint:0379. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Angela Procopio).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.