An assessment of the realization of merger motivations for the top three most actively merging commercial banks in the Philippines done from 1998 to 2005

• Main Authors: Lacsina, Kervin Ray A., Morales, Joan Lein D., Rigor, Juan Rodrigo A.
• Format: text
• Language: English
• Published: Animo Repository 2008
• Subjects: Banks and banking > Philippines; Bank mergers > Philippines; Finance and Financial Management
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/6313
• Institution: De La Salle University

There have been numerous mergers in the financial industry throughout the globe. There has to be a logical reason behind the move of banks to enter into a merger deal which may be qualitative or quantitative. Quantifiable motivations of activity merging commercial banks in the Philippines were assessed in this study. It is expected that the main motivation of banks in a merger transaction is to create additional shareholders' wealth. This can be achieved by evaluating the bank in terms of their solvency, efficiency, profitability and liquidity. Specific ratios from the CAMELS framework were used to assess whether there was an improvement in the surviving bank two years after the merger. The data gathered were also analyzed using T-tests to evaluate the significance of the change in the ratios pre and post merger and was then compared with the interview or questionnaire results. It can be concluded that the merger of universal/commercial banks in terms of the key performance indicators have not achieved improvement two years after the merger. It is recommended to have a longer time horizon in further studies of merger deals in the Philippines. Other means and ways of evaluating the realization of the merger motivations of banks are by using firm valuation techniques, historical stock price performance and by focusing on a case-to-case analysis.