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Dividend Policy of Bank Initial Public Offerings

Posted: 17 May 2006  

Wolfgang Bessler

Justus-Liebig-University Giessen

James P. Murtagh

Siena College

Dona D. Siregar

Rensselaer Polytechnic Institute (RPI)

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This paper investigates the short-term valuation effects and the long-run performance of bank initial public offerings in the United States from 1972 to 1997. Overall, the empirical results provide significant evidence that the dividend policy of bank IPOs differ from that of non-banks. The dividend policy of bank IPOs has a significant impact on the long-run performance. Most importantly, banks that later on were acquired outperform the benchmark significantly and banks that continue to operate independently as well as banks that eventually failed both under-perform. Moreover, the beginning of the dividend payment is an important characteristic that separates the out-performers from the under-performers.

Keywords: dividend policy, bank, initial public offerings

JEL Classification: G21, G35

Suggested Citation

Bessler, Wolfgang and Murtagh, James P. and Siregar, Dona D., Dividend Policy of Bank Initial Public Offerings. EFMA 2003 Helsinki Meetings, 2003. Available at SSRN: or

Wolfgang Bessler

Justus-Liebig-University Giessen ( email )

Center for Finance and Banking
Licher Strasse 74
Giessen, D-35394
49-641-9922460 (Phone)
49-641-9922469 (Fax)


James Murtagh (Contact Author)

Siena College ( email )

Loudonville, NY
United States

Dona Siregar

Rensselaer Polytechnic Institute (RPI)

Troy, NY 12180
United States

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