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Evaluation of Pre and Post Demerger-Merger Performance: Using ABN AMRO Bank as an Example

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  • Han Bao

Abstract

This study attempts to measure the impact of simultaneously demerger and merger over the financial performance of ABN AMRO Bank for the period 2007-2013 by using the DuPont system of financial analysis. ABN AMRO Bank N.V. is a Dutch state-owned bank with headquarters in Amsterdam. The bank demerged from Royal Bank of Scotland Group (RBS) in the first quarter of 2010 and merged with Fortis Bank Nederland from July 1, 2010. Two statistical techniques are used in this study; first the analysis of pre and post Demerger-Merger financial ratios is drawn and second paired sample t-test is used. Based on the analysis of 3 years pre and post Demerger-Merger financial ratios and data of ABN AMRO Bank, the result shows that the event of merger-demerger has no significant influence on the bank¡¯s Net profit margin, Total asset turnover, Return on equity and Equity multiplier. This research fills the gap of Demerger-Merger analysis in the bank industry by using DuPont system of financial analysis.

Suggested Citation

  • Han Bao, 2017. "Evaluation of Pre and Post Demerger-Merger Performance: Using ABN AMRO Bank as an Example," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 9(2), pages 196-204, February.
    • Handle: RePEc:ibn:ijefaa:v:9:y:2017:i:2:p:196-204
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    References listed on IDEAS

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    1. Sinha, Pankaj & Gupta, Sushant, 2011. "Mergers and Acquisitions: A pre-post analysis for the Indian financial services sector," MPRA Paper 31253, University Library of Munich, Germany.
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    Cited by:

    1. Camelia Mirela Baba & Constantin Duguleană & Marius Sorin Dincă & Liliana Duguleană & Gheorghița Dincă, 2021. "The Demerger Impact upon Sustainable Development of Economic Entities: Evidence from Romania," Sustainability, MDPI, vol. 13(15), pages 1-15, July.
    2. Constantin Duguleana & Liliana Duguleana & Camelia Mirela Baba & Cristina Drumea, 2022. "Recovery after Demerger: Evidence from Romanian Companies," Sustainability, MDPI, vol. 14(3), pages 1-27, January.

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    More about this item

    Keywords

    merger; demerger; DuPont analysis; return on equity; net profit margin;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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