MERGERS AND ACQUISITIONS. AN EVALUATION ANALYSIS OF BANKRUPTCY PRE AND POST OF BOTH EVENTS. EVIDENCE FROM GREECE

Abstract

The banking sector is one of the most important sectors in economy of the world and occupies a prominent position in the development. The banking system in Greece is regulated by the European Central Bank (ECB) and is composed of various types of banks, including systemic commercial banks, non systemic commercial banks and cooperative banks. The purpose of this study is to study the case of the reduction or not of the occurrence of bank bankruptcy after the acquisition they made of banks with financial difficulties. For this purpose, we study the possible bankruptcy of the acquired banks before their acquisition, as well as the possible bankruptcy of the acquiring banks before and after the acquisition. There are several models for predicting bankruptcy, including financial ratio analysis Z-score model, Zeta model, financial soundness model and other models. In this study to predict bankruptcy for banks we use the Zeta model for banks. This model is one of the commonly used in the international scientific community. The time period of the study is defined after the beginning of the global financial crisis in the year of 2008 and before the pandemic. This global financial crisis as known invaded Greece mainly in year 2010 an the pandemic started at the end of year 2019. The examined time period concerns both a short-term and a long-term period of time for the most rational drawing of conclusions. This specific study is based on the analysis of two of the most characteristic cases involving Greek banks involved in takeovers. One case concerns Greek cooperative banks and the other one concerns Greek systemic banks.
 Keywords: Cooperative Banks, Mergers & Acquisitions, Cash Flows Ratio, Profitability, Insolvency.
 JEL Classifications: G21, G33, G34