MERGERS AND ACQUISITIONS: A PRE AND POST FINANCIAL RATIO ANALYSIS EVALUATION. EVIDENCE FROM GREECE

Abstract

The mergers and acquisitions are a modern phenomenon in the financial sector. Like every business, so are the Banks looking for opportunities and ways to become more competitive to cope with the changes in the market. In this article we examine the profitability, liquidity and operational financial ratios in a pre and post acquisition case study from the Greek Banking System. From the analysis of those ratios we try to find out if there is an improvement of them when the bidder bank takeovers a "bad" target bank, and if any improvement how many years after the acquisition observed. The case of a pre and post acquisition of Emporiki Bank of Greece by Alpha Bank of Greece is a representative case study for describing what happened in Greece during the before and after the financial crisis. For examine this case study we use financial analysis evaluation with the most significant financial ratios of the involved int acquisition Greek banks. The evaluation of the acquisition is made with the use of balance sheets and the financial reports of the banks pre and post the acquisition took place. The research is based on the use of liquidity profitability and operational ratios and so the performance of the involved banks is presented and analyzed before and after the acquisition. Presenting and analyzing the performance of the two involved in acquisition banks, with the help of financial data will lead to conclusions about whether the acquiring bank has achieved its objectives. Of course these objectives were the improvement of profitability liquidity and operation profit of the bidder Alpha Bank
 Keywords: Banks, Mergers & Acquisitions, Financial Ratio Analysis, Liquidity Profitability.
 JEL Classification: G21, G33, G34