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The Diversification of Banking Capital Sources and Cash Flow Granularity in Merger and Acquisition Transactions

Author

Listed:
  • Natalia Nikolaevna Natocheeva
  • Yury Alexandrovich Rovensky
  • Tatiana Viktorovna Belyanchikova
  • Yury Yuryevich Rusanov

Abstract

The article analyzes banking merger and acquisition (M&A) market over the past three years. The conducted analysis has shown that there is a market outflow of foreign investors, while deals become larger, and banks are consolidating, including that with other non-banking sectors in order to strengthen market positions and consolidate capital, the cost of which is dependent on several factors. The authors have developed price parameters characterizing banking capitals involved in transactions on M&A market. The price parameters include inflation rate, present discounted value, tax level, capital structure, interest rates for attraction and placement of funds of credit institutions, as well as the parameters, which have not yet been considered in the existing theories. These are the diversification level of capital sources and the granularity of the banking cash flows. The authors put forward the hypothesis about the significant impact of these price parameters on the capital cost of banks involved in mergers and acquisitions (M&As), and proposed three optimization options, namely spatial, temporal, and spatiotemporal optimization. Confirmation of the hypothesis was reflected in spatiotemporal optimization of capital sources diversification and cash flow granularity of the credit organizations.

Suggested Citation

  • Natalia Nikolaevna Natocheeva & Yury Alexandrovich Rovensky & Tatiana Viktorovna Belyanchikova & Yury Yuryevich Rusanov, 2017. "The Diversification of Banking Capital Sources and Cash Flow Granularity in Merger and Acquisition Transactions," European Research Studies Journal, European Research Studies Journal, vol. 0(4A), pages 501-514.
  • Handle: RePEc:ers:journl:v:xx:y:2017:i:4a:p:501-514
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    File URL: http://ersj.eu/dmdocuments/2017-xx-4-a-35.pdf
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    References listed on IDEAS

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    1. Eleftherios THALASSINOS, 2008. "Trends and Developments in the European Financial Sector," European Financial and Accounting Journal, University of Economics, Prague, vol. 2008(3), pages 44-61.
    2. Stavros H. Arvanitis & Irakleia S. Tzigkounaki & Theodoros V. Stamatopoulos & Eleftherios I. Thalassinos, 2012. "Dynamic Approach of Capital Structure of European Shipping Companies," International Journal of Business and Economic Sciences Applied Research (IJBESAR), Eastern Macedonia and Thrace Institute of Technology (EMATTECH), Kavala, Greece, vol. 5(3), pages 33-63, December.
    3. Konstantinos Liapis & Antonios Rovolis & Christos Galanos & Eleftherios Thalassinos, 2013. "The Clusters of Economic Similarities between EU Countries: A View Under Recent Financial and Debt Crisis," European Research Studies Journal, European Research Studies Journal, vol. 0(1), pages 41-66.
    4. repec:ers:journl:v:xx:y:2017:i:3a:p:69-81 is not listed on IDEAS
    5. Jean-Pierre Allegret & Helene Raymond & Houda Rharrabti, 2016. "The Impact of the Eurozone Crisis on European Banks Stocks Contagion or Interdependence?," European Research Studies Journal, European Research Studies Journal, vol. 0(1), pages 129-148.
    6. repec:ers:journl:v:xx:y:2017:i:2a:p:128-139 is not listed on IDEAS
    7. repec:ers:journl:v:xx:y:2017:i:3b:p:490-499 is not listed on IDEAS
    8. Eleftherios I. Thalassinos & Bozhana Venediktova & Daniela Staneva-Petkova & Vicky Zampeta, 2013. "Way of Banking Development Abroad: Branches or Subsidiaries," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(3), pages 69-78.
    9. repec:ers:ijebaa:v:iv:y:2016:i:1:p:70-85 is not listed on IDEAS
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    More about this item

    Keywords

    Mergers and acquisitions; price parameters; diversification of sources; granularity of cash flow; banking capital; spatial optimization; temporal optimization; spatiotemporal optimization; financial losses. JEL Classification: G21; G30; G34; G39.;

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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