An empirical analysis of bank mergers and cost efficiency in the Philippines from 2000-2011

• Main Authors: Chan, Katrina, Go, Mary Jane, Go, Tiffany Joy, Kun, Leung Kin, Lim, Steven
• Format: text
• Language: English
• Published: Animo Repository 2013
• Subjects: Bank mergers > Philippines; Banks and banking > Philippines; Finance and Financial Management
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/6283
• Institution: De La Salle University

The global financial crisis had caused a number of financial institutions severe damages on their capital structures and had even led to bankruptcy for some. Following the crisis, monetary authorities started to discourage the creation of more banks and the concept of consolidation was promoted for the primary goals of the firms were to increase effciency, gain competitive advantage, and increase dominance and market share. The expected outcome of mergers and acquisitions were economies of sclae and increased productivity. This study compiled the input and output balanced panel data of 11 selected local universal banks in the Philippines and used a two-stage method to evaluate the individual bank's efficiency. The period covered for this study is from the years 2000 to 2011. In general, this study will focus on evaluating the pre and post cost efficiencies of the selected banks for the given time frame. The findings of this study suggests that a merger between universal banks and rural banks could lead to an increase in cost efficiency and synergy gains for M&A may take some time to be realized.