Bank Consolidation and Performance
AbstractWe examine a large panel of more than 100 banks from Argentina to study the effects of bank consolidation on performance between December 1995 and December 2000, a period of heavy bank consolidation and relative calm. Overall, we find a positive and significant effect of bank consolidation on bank performance. Bank returns increase with consolidation, and insolvency risk is reduced. Additionally, the study suggests that mergers and privatizations have a beneficial effect on bank returns. The effects of a bank acquisition on return on equity is, however, negative. Acquisitions do not seem to have any effect on risk-adjusted returns. The study also finds that a bank''s insolvency risk is reduced significantly through mergers and privatization and is unrelated to bank acquisitions.
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Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 04/149.
Date of creation: 01 Aug 2004
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-10-23 (All new papers)
- NEP-CFN-2005-10-26 (Corporate Finance)
- NEP-COM-2005-10-27 (Industrial Competition)
- NEP-EFF-2005-10-30 (Efficiency & Productivity)
- NEP-FIN-2005-10-22 (Finance)
- NEP-FMK-2005-10-25 (Financial Markets)
- NEP-LAM-2005-10-31 (Central & South America)
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