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Performance Changes Around Banks Mergers and Acquisitions: Evidence from Poland

Author

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  • Budny Katarzyna

    (Cracow University of Economics, Cracow, Poland)

  • Krasodomska Joanna

    (Cracow University of Economics, Cracow, Poland)

  • Świetla Katarzyna

    (Cracow University of Economics, Cracow, Poland)

Abstract

This study investigates the influence of M&A on the performance of banks operating in Poland. We use a sample of 14 transactions that occurred in the Polish banking sector from 2001 to 2015. Our data set includes pre and post-merger accounting information covering a period of two years before and after the merger. We follow Pilloff’s [1996] approach to determine the average performance changes measured with ROAA and ROAE. According to the research results, M&As transactions seem to affect profitability as both ROAA and ROAE means change. However, these changes do not follow the same trend. The correlations between the acquirer’s pre-merger weighted performance measured with ROAA and ROAE and merger-related changes in performance are significant and negative. The same situation is observed as regards the target pre-merger weighted performance measured with ROAE and merger-related changes in performance. The results also suggest that large acquirers are associated with less successful M&A.

Suggested Citation

  • Budny Katarzyna & Krasodomska Joanna & Świetla Katarzyna, 2019. "Performance Changes Around Banks Mergers and Acquisitions: Evidence from Poland," Financial Sciences. Nauki o Finansach, Sciendo, vol. 24(2), pages 28-45, June.
    • Handle: RePEc:vrs:finsci:v:24:y:2019:i:2:p:28-45:n:3
    DOI: 10.15611/fins.2019.2.03
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    References listed on IDEAS

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    More about this item

    Keywords

    banks; M&A; Poland; ROAA; ROAE;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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