The impact of mergers inefficiency: a case study of banking status

Abstract

The purpose of this project is to examine whether the wave of bank mergers in Europe (1990s to the present) has led to improvements in bank profitability, bank efficiency, and benefits to consumers. We identify trends and average in financial data for various banks pre and post merger, and situate our results within the context of developments within the various countries. There are many reasons for bank mergers: economy of scales, resources, or acquisition of talented management. Increasing shareholders profit may provide the primary incentive for mergers, although greater market power is another motivation. The result of this project, however, is a comprehensive listing of improvements in the profitability of European banks from mergers, efficiencies, and, finally, benefits to consumers. The project's framework was trends per unit output.