Increases in Size and Bank Default Risk: Evidence from European Bank Mergers

2013 ◽  
pp. 33-61
Author(s):  
Jens Hagendorff
Keyword(s):  
Default Risk ◽  
Bank Mergers ◽  
European Bank

scholarly journals The impact of European bank mergers on bidder default risk

2011 ◽  
Vol 35 (4) ◽  
pp. 902-915 ◽  
Author(s):  
Francesco Vallascas ◽  
Jens Hagendorff
Keyword(s):  
Default Risk ◽  
Bank Mergers ◽  
European Bank ◽  
The Impact

Announced versus canceled bank mergers and acquisitions

2016 ◽  
Vol 17 (5) ◽  
pp. 510-544 ◽  
Author(s):  
Armin Varmaz ◽  
Jonas Laibner
Keyword(s):  
Mergers And Acquisitions ◽  
Shareholder Value ◽  
Abnormal Returns ◽  
Bank Mergers ◽  
Cross Sectional ◽  
Market Reactions ◽  
Content Type ◽  
European Bank ◽  
Long Time ◽  
Loan Losses

Purpose This paper aims to empirically analyze the success of European bank mergers and acquisitions (M&As) by an analysis of the shareholder value implications of stock market reactions to announced and canceled M&As in the period from 1999 to 2015. Design/methodology/approach The analysis of a sample of 467 announced and 54 canceled European bank M&As is conducted using event study methodology. The determinants of the shareholder value creations in M&A are observed in cross-sectional regressions. The likelihood of M&As being canceled is estimated in logit regressions. Findings The paper finds that European bank M&As have not been successful in terms of shareholder value creation for acquiring banks, whereas targets experienced significant value gains. Abnormal returns for bidders and targets exhibit the same characteristics upon the announcement of M&As that are canceled at a later date, whereas the results for transaction cancelations deviate. Targets experience negative abnormal returns at a larger size than upon the transaction announcement. The findings for bidders are striking, as they destroy shareholder value upon the transaction cancelation, also, consequently they suffer twice. In particular, banks with higher profitability, higher efficiency and lower liquidity experience negative abnormal returns around the announcement dates. Negative abnormal returns prior to the transaction announcement and provision for loan losses increase significantly the likelihood of M&A cancelation. Originality/value This paper contributes to the literature expanding existing analyses to the shareholder value implications of canceled European bank M&As in a 17-year long time period. The findings reveal the destructive characteristics of canceled bank M&As and provide innovative insights into European capital market reaction to canceled M&As.

Book Reviews

2014 ◽  
Vol 52 (3) ◽  
pp. 861-862
Keyword(s):  
Financial Services ◽  
Default Risk ◽  
Banking Industry ◽  
Associate Professor ◽  
International Institute ◽  
Executive Pay ◽  
European Bank ◽  
European Banking ◽  
Board Monitoring ◽  
The University

Examines size, risk, and governance in European banking. Discusses bank systemic size and systemic crises; increasing in size and bank default risk—evidence from European bank mergers; the trends and composition of banking risk across Europe; the determinants of European bank exposure to systemic shocks; board monitoring, regulation, and performance in the European banking industry; executive pay and risk-taking in the European banking industry; systemic risk potential and opacity in European banks; and implications for the reregulation of European banking. Hagendorff is Martin Currie Professor in Finance and Investment at the University of Edinburgh. Keasey is Professor of Financial Services, Director of the International Institute of Banking and Financial Services, and Head of the Accounting and Finance Department at the University of Leeds. Vallascas is Associate Professor of Banking and Finance at the University of Leeds.

The Determinants of Target Returns in European Bank Mergers

2007 ◽  
Vol 27 (5) ◽  
pp. 617-634 ◽  
Author(s):  
Ahmad Ismail ◽  
Ian Davidson
Keyword(s):  
Bank Mergers ◽  
European Bank

Size, Target Performance and European Bank Mergers and Acquisitions

2008 ◽  
Vol 23 (1) ◽  
pp. 53-64 ◽  
Author(s):  
Sergio Sanfilippo Azofra ◽  
Myriam Garcia Olalla ◽  
Begoña Torre Olmo
Keyword(s):  
Mergers And Acquisitions ◽  
Bank Mergers ◽  
European Bank ◽  
Target Performance ◽  
Size Target

Operating performance of European bank mergers

2009 ◽  
Vol 29 (3) ◽  
pp. 345-366 ◽  
Author(s):  
Ahmad Ismail ◽  
Ian Davidson ◽  
Regina Frank
Keyword(s):  
Operating Performance ◽  
Bank Mergers ◽  
European Bank

Market valuation of European bank mergers

1999 ◽  
Vol 17 (5) ◽  
pp. 532-540 ◽  
Author(s):  
Alireza Tourani Rad ◽  
Luuk Van Beek
Keyword(s):  
Market Valuation ◽  
Bank Mergers ◽  
European Bank

Valuing Credit Default Swaps I: No Counterparty Default Risk

CFA Digest ◽  
2001 ◽  
Vol 31 (2) ◽  
pp. 91-92 ◽  
Author(s):  
Bruce D. Phelps
Keyword(s):  
Default Risk ◽  
Credit Default Swaps ◽  
Credit Default
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