The Influence of Mergers and Acquisitions on Financial Performance and Stock Return of Indonesian Banks (Published)
Business environment has changed rapidly due to dynamic changes in the current global era. Merger and acquisition activities are not a new phenomenon in the business world, and it’s an important business phenomenon. One of the changes that can be seen from the merger and acquisition activities are company’s financial performance and stock return. The purpose of this study is to analyze banks financial performance with financial ratios before and after mergers and acquisitions, analyze the effect of mergers and acquisitions on bank financial performance and analyze the factors that influence the success of mergers and acquisitions. This research used Kolmogorov-Smirnov normality test and Wilcoxon test and logistic regression. The results showed that ROA, OER, NPL, NIM and LDR improved after mergers and acquisitions. Mergers and acquisitions also affect the differences in ROA, OER, NPL, NIM, and LDR before and after mergers and acquisitions. Factors that affect the success of mergers and acquisitions are foreign ownership, acquisition percentage and firm size when viewed the success of merger and acquisition from bank’s ability to increase its net profit. In addition, when viewed from the stock returns obtained factors that affect the success of a merger and acquisition are foreign ownership, the percentage of acquisitions and industry relatedness.
Keywords: Financial Performance, Merger and Acquisition., Stock Return
MERGER AND ACQUISITION AS CONSOLIDATION INSTRUMENTS FOR CORRECTING THE DEFICIENCIES IN THE BANKING SECTOR (A Case of United Bank for Africa Plc) (Published)
Banks’ recapitalization is based on a belief that gains can accrue through expense reduction, increased market power, reduced earnings volatility, and scale and scope economies. However, whether or not merger and acquisition scheme, widely employed by banks in Nigeria during the recapitalization exercise between 2004 and 2005, actually assist in realizing the expected gains is the basis of this research work. Thus, the hypothesis that bank merger and acquisition does not affect the banks’ performance in Nigeria was tested. The Survey and content analysis method of data collection were adopted in this study. Analysis of the data, which were collected through a self-administrated questionnaire, was done using the simple percentage method, Chi-Square and goodness of fit at one per cent level of significance, while the secondary data were presented using tables and percentages. The results of the analyses showed that merger and acquisition improved banks’ efficiency in Nigeria. Some of the recommendations made in this study are that: the emergence of threat posed by mega bank should be checked, priority should be given to the quality of management of banks, good credit policy should be put in place and reviewed regularly and a functional internal control system should be established in order to prevent the incidence of fraud and other anomalies in the banking system.
Keywords: Earnings Volatility, Mega Banks, Merger and Acquisition., Recapitalization, Take-Over Bid