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Banks M&A: Strategy and Valuation

In: How to Value a Bank

Author

Listed:
  • Alessandro Santoni

    (European Central Bank)

  • Federico Salerno

    (European Central Bank)

Abstract

Valuing a Bank in an M&A scenario can be challenging, and several factors and points of views would need to be considered. The starting point of an M&A valuation can be the traditional methodologies used for valuing a Bank in a normal scenario. In this chapter, we investigate some of the critical aspects of a Banking M&A and the valuation implications from two points of view: the shareholders’ point of view and the supervisors’ point of view. From the shareholders’ point of view, the key aspects to be considered are the calculation of the synergies arising from the M&A and the potential earning accretion/dilution. On the other side, Banks M&A are always assessed by supervisors on a case-by-case basis. The main objectives from their point of view will be to ascertain, to the extent possible, the sustainability of the business model of the combined entity. In this sense, the analysis of the potential goodwill impairment represents a key component of the consideration.

Suggested Citation

  • Alessandro Santoni & Federico Salerno, 2023. "Banks M&A: Strategy and Valuation," Springer Texts in Business and Economics, in: How to Value a Bank, pages 45-57, Springer.
    • Handle: RePEc:spr:sptchp:978-3-031-43872-1_4
    DOI: 10.1007/978-3-031-43872-1_4
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