MNC Bank Losses in Asia: Lessons for MNC Banking or Opportunity Loss?

Abstract

Foreign Banks have engendered followers and detractors in each host dispensation and in their home countries. After the recent bank crisis they continue increasing their presence in Asian and Emerging markets (Claessens and Horens, 2014), yet activity in Markets for Corporate Control has been seemingly confounded because of the crisis events. In the Markets for Corporate Control, there is considerable evidence of attenuation in both Emerging and Advanced Economies. Yet, Cross border acquisitions now account for a growing majority of completed transactions. A new class of event studies from Asia and China showing large positive Abnormal returns imply strong shareholder wealth gains and confirm value accretion to Acquirers from transactions increasing Control (Song, Tippett and Vivian, 2017). At the same time, Multinational Banks’ exits show diminution of shareholder wealth and addition of value to domestic/cross border acquirers.

Keywords: Event Studies, Mergers and Acquisitions, Bank M&A, Markets for Corporate Control, Multinational Banks

JEL Classification: G14, F21, F23