A study on the financial performance of selected thrift banks prior and after the acquisitions

• Main Authors: Caguioa, Claudine L., Matias, Robert Vincent C., Pe Aguirre, Liezela Marie R.
• Format: text
• Language: English
• Published: Animo Repository 2005
• Subjects: Banks and banking > Philippines; Finance and Financial Management
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/18443
• Institution: De La Salle University

In theory, acquisitions are supposed to enhance the value and performance of the acquiring firm. Studies on thrift bank acquisitions have been minimal. With this in mind, the proponents saw this as an opportunity to expound our knowledge about acquisitions in the country. That is, if the value enhancing theory is applicable to thrift banks in the Philippines. Thrift banks cater to small and medium-sized enterprises (SME's) which are now encouraged to be more competitive in the Philippine scenario. Thus, thrift banks play an important role since it helps the SME's in financing their company projects and activities. With this, the proponents integrated theories and previous studies to be able to come up with financial ratios that can be used to test whether these ratios affect the financial performance of the selected acquiring banks. The researchers aim to determine whether the acquiring bank's financial performance improved after acquisition. The proponents used Altman's z-score in determining the acquiring bank's overall performance. They also used logistic regression to determine if selected financial ratios (ROA, ROE, risk, liquidity, efficiency and leverage) have an effect in the financial performance of the bank. The results came out to be that the selected financial ratios are insignificant to the financial performance of a bank that were not included in the study. Also, the limited number of variables can also be a reason why the selected financial ratios resulted as insignificant.