Abstract

http://ssrn.com/abstract=965234
 


 



Does Operating Performance Really Improve Following Mergers? The Case of Malaysian Banks


Wan Mansor Mahmood


MARA University of Technology

Rashidah Mohamad


Universiti Teknologi Malaysia (UTM)


Icfai Journal of Mergers & Acquisitions, Vol. 4, No. 3, pp. 69-78, September 2007

Abstract:     
This study examines whether the recent bank mergers in Malaysia did create synergies as reflected in corporate operating performance measures. Four accrual operating performance measures are used, i.e. Return on Assets (ROA), Return on Equity (ROE), Profit Margin (PM), and Earnings Per Share (EPS). Using a sample of eight anchor banks for a sample period beginning 1997 through 2002, the results show that bank mergers had a significant post-merger improvement that is consistent with the findings of Neely and Rochester (1987) who also employed accrual performance measures in their study on savings and loan institutions in the US. The findings suggest that even though the mergers are 'forced' in nature, it can contribute to synergistic benefits. The gain in the post-merger operating performance was mainly due to the provisions for loan loss, which on average was much lower during the post-merger period compared to the pre-merger period. The study also finds that there is insignificant continuance of pre-merger performance into the post-merger period.

Keywords: M41, G21, G34

JEL Classification: banks,bank mergers, synergy, operating performance

Accepted Paper Series


Not Available For Download

Date posted: February 26, 2007  

Suggested Citation

Mahmood, Wan Mansor and Mohamad, Rashidah, Does Operating Performance Really Improve Following Mergers? The Case of Malaysian Banks. Icfai Journal of Mergers & Acquisitions, Vol. 4, No. 3, pp. 69-78, September 2007. Available at SSRN: http://ssrn.com/abstract=965234

Contact Information

Wan Mansor Wan Mahmood (Contact Author)
Universiti Teknologi MARA (UiTM) ( email )
Sura Hujung
Dungun, Terengganu 23000
Malaysia
609 8403774 (Phone)
609 8403777 (Fax)
HOME PAGE: http://www.tganu.uitm.edu.my/
Rashidah Mohamad
Universiti Teknologi Malaysia (UTM) ( email )
UiTM
Skudai, Johor Bahru, Malaysia
Shah Alam, Selangor 40450
Malaysia
Feedback to SSRN


Paper statistics
Abstract Views: 979

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo7 in 0.234 seconds