Abstract
Abstract. The globalization of markets, the need to comply with modern economic trends and introduce new technological solutions to increase the profitability of the banking business have significantly intensified the processes of mergers and acquisitions in the banking sector. M&A processes are long and complex, their results are difficult to forecast in lack of actual detailed research. The diversity of the results of the available research requires updating the data based on larger volumes of transactions and larger time intervals. The purpose of the article is to substantiate two hypotheses: first, the impact of M&A agreements especially on the increase in the value of banks; and impact of factors that show economic development level on the value of banks. The object of the study is the relationship between the value of commercial banks in domestic and foreign financial markets, M&A agreements, as well as economic indicators published by the World Bank and measuring the level of economic development of countries. The article uses statistical modeling method. The constructed model of linear regression allows to state that the fact of influence of M&A on growth of cost of consolidated banks is fair for 54.8% of cases. The study shows that the M&A processes have the greatest impact on the value of banks in the interval of 3—5 years after the conclusion of the agreement. Analysis of the relationship between economic indicators and the growth of bank value shows that the greatest impact on the value of banks has percent of the growth of GDP and GDP per capita, but the low value of the determinant at 22.9% indicates a low dependence of bank value on the level of economic indicators in general. It was found that external factors do not directly affect the growth in the value of banks in the process of M&A transactions. The question of expanding the system of factors that will influence the M&A processes and, as a consequence, the value of the banks, will be the subject of further research. Keywords: globalization of markets, mergers and acquisitions of banks, consolidation, M&A dynamic, market capitalization, bank value. JEL Classification Е44, Е47, G14 Formulas: 2; fig.: 4; tabl.: 4; bibl.: 14.
Highlights
Banking system in both domestic and foreign markets is no longer a separate system providing financial services, a modern commercial bank is mainly focused on the customer offering new products
The dynamics of economic development influence the dynamics of capital consolidation processes, which, in turn, encourages scientists and businesses to more deeply analyze M&A transactions and their relationship to value
The large volume of transactions carried out during the period 1960—2019 indicates an increase in trends in the M&A processes of the financial sector, which often do not correlate with the results of many studies about the decline in the value of a consolidated bank after the conclusion of the agreement
Summary
Banking system in both domestic and foreign markets is no longer a separate system providing financial services, a modern commercial bank is mainly focused on the customer offering new products. Flexibility of global and local markets encourages banks to maintain overall economic trends, introduce new technology solutions into their operations, as well as develop new units to increase their business profitability. A rather productive approach for implementation of all above-mentioned activities is to search for related competitor banks in order to consolidate capital, increase market share and resulting value. The dynamics of economic development influence the dynamics of capital consolidation processes, which, in turn, encourages scientists and businesses to more deeply analyze M&A transactions and their relationship to value. The large volume of transactions carried out during the period 1960—2019 indicates an increase in trends in the M&A processes of the financial sector, which often do not correlate with the results of many studies about the decline in the value of a consolidated bank after the conclusion of the agreement. The current dynamics of the M&A market of the banking sector and the relationship of transactions with the value of banks need to update research
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