Merger & acquisition in the banking sector

Abstract

Nowadays there is a considerable amount of information in the literature about mergers and acquisitions of companies in various business fields which gives the world economy an incentive for mergers and acquisitions of financial institutions – banks, which, having large assets, control economic processes in individual countries. The article examines the current state of the market of mergers and acquisitions in the banking sector of Europe and Ukraine. The experience of merging banking structures is examined, the advantages and disadvantages of concluding agreements are identified, factors that may trigger merger or acquisition agreements are identified. The purpose of the article is to investigate the processes of mergers and acquisitions of banks in the Ukrainian and European financial markets. The current market conditions dictate strict rules not only for entry, but also for the functioning of banks in their segment. Globalization processes in today's world are one of the prerequisites for increasing the number of mergers and acquisitions concluded in the banking sector. The article examines the current state of the market of mergers and acquisitions in the banking sector of Europe and Ukraine. The experience of merging banking structures is examined, the advantages and disadvantages of concluding agreements are identified, factors that may trigger merger or acquisition agreements are identified. The merger or acquisition agreements concluded on the European banking market have been analyzed. By analyzing the concluded M&A agreements in the European banking market, we can say that the value of such agreements is gradually reduced over the period 2012-2017. The practice of merger and acquisition agreements in the banking sector of Ukraine is analyzed. Crises in the banking sector and the Ukrainian economy as a whole make it possible to say that investors are less interested in the domestic banking system, which indicates that it is impossible to increase the number of mergers and acquisitions of domestic banking institutions. It is worth noting that there are currently about 100 banks in Ukraine that are declared insolvent, and a significant amount of non-performing loans can be a serious deterrent to increasing M&A transactions.