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Does operating performance really improve following financial institutions merger : a case of Malaysian banks / Wan Mansor Mahmood and Rashidah Mohamad

This study examines whether the recent bank mergers exercise in Malaysia create synergies reflected in corporate operating performance measures. Four accrual operatingperformance measures are used, i.e. Return on Asset (ROA), Return on Equity (ROE), Profit Margin (PM), and Earning Per Share (EPS). U...

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Main Authors: Mahmood, Wan Mansor, Mohamad, Rashidah
Format: Article
Language:English
Published: Institute of Research, Development and Commercialization (IRDC) 2007
Subjects:
Bank mergers
Special classes of banks and financial institutions
Malaysia
Online Access:http://ir.uitm.edu.my/id/eprint/13028/1/AJ_WAN%20MANSOR%20MAHMOOD%20SMRJ%2007%201.pdf
http://ir.uitm.edu.my/id/eprint/13028/
https://smrj.uitm.edu.my/
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spelling my.uitm.ir.130282016-06-15T03:14:06Z http://ir.uitm.edu.my/id/eprint/13028/ Does operating performance really improve following financial institutions merger : a case of Malaysian banks / Wan Mansor Mahmood and Rashidah Mohamad Mahmood, Wan Mansor Mohamad, Rashidah Bank mergers Special classes of banks and financial institutions Malaysia This study examines whether the recent bank mergers exercise in Malaysia create synergies reflected in corporate operating performance measures. Four accrual operatingperformance measures are used, i.e. Return on Asset (ROA), Return on Equity (ROE), Profit Margin (PM), and Earning Per Share (EPS). Using a sample of eight anchor banks for a sample period beginning 1997 through 2002, the results show that bank mergers lead to significant post merger improvements, which is consistent with the findings of Neely and Rochester (1987) who also employ accrual performance measures in their study on savings and loan institutions in the us. The findings suggest that even though the mergers are 'forced' in nature, it is able to contribute to the synergistic benefits. The gain in the post-merger operating performance is likely to be due to the provisions for loan loss, which on average is much lower during the post-merger period compared to the pre-merger period. The study also finds that there is an insignificant continuance of pre-merger performance into the post-merger period. Institute of Research, Development and Commercialization (IRDC) 2007 Article PeerReviewed text en http://ir.uitm.edu.my/id/eprint/13028/1/AJ_WAN%20MANSOR%20MAHMOOD%20SMRJ%2007%201.pdf Mahmood, Wan Mansor and Mohamad, Rashidah (2007) Does operating performance really improve following financial institutions merger : a case of Malaysian banks / Wan Mansor Mahmood and Rashidah Mohamad. Social and Management Research Journal (SMRJ), 4 (1). pp. 77-86. ISSN 1675-7017 https://smrj.uitm.edu.my/
institution Universiti Teknologi Mara
building Tun Abdul Razak Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Teknologi Mara
content_source UiTM Institutional Repository
url_provider http://ir.uitm.edu.my/
language English
topic Bank mergers
Special classes of banks and financial institutions
Malaysia
spellingShingle Bank mergers
Special classes of banks and financial institutions
Malaysia
Mahmood, Wan Mansor
Mohamad, Rashidah
Does operating performance really improve following financial institutions merger : a case of Malaysian banks / Wan Mansor Mahmood and Rashidah Mohamad
description This study examines whether the recent bank mergers exercise in Malaysia create synergies reflected in corporate operating performance measures. Four accrual operatingperformance measures are used, i.e. Return on Asset (ROA), Return on Equity (ROE), Profit Margin (PM), and Earning Per Share (EPS). Using a sample of eight anchor banks for a sample period beginning 1997 through 2002, the results show that bank mergers lead to significant post merger improvements, which is consistent with the findings of Neely and Rochester (1987) who also employ accrual performance measures in their study on savings and loan institutions in the us. The findings suggest that even though the mergers are 'forced' in nature, it is able to contribute to the synergistic benefits. The gain in the post-merger operating performance is likely to be due to the provisions for loan loss, which on average is much lower during the post-merger period compared to the pre-merger period. The study also finds that there is an insignificant continuance of pre-merger performance into the post-merger period.
format Article
author Mahmood, Wan Mansor
Mohamad, Rashidah
author_facet Mahmood, Wan Mansor
Mohamad, Rashidah
author_sort Mahmood, Wan Mansor
title Does operating performance really improve following financial institutions merger : a case of Malaysian banks / Wan Mansor Mahmood and Rashidah Mohamad
title_short Does operating performance really improve following financial institutions merger : a case of Malaysian banks / Wan Mansor Mahmood and Rashidah Mohamad
title_full Does operating performance really improve following financial institutions merger : a case of Malaysian banks / Wan Mansor Mahmood and Rashidah Mohamad
title_fullStr Does operating performance really improve following financial institutions merger : a case of Malaysian banks / Wan Mansor Mahmood and Rashidah Mohamad
title_full_unstemmed Does operating performance really improve following financial institutions merger : a case of Malaysian banks / Wan Mansor Mahmood and Rashidah Mohamad
title_sort does operating performance really improve following financial institutions merger : a case of malaysian banks / wan mansor mahmood and rashidah mohamad
publisher Institute of Research, Development and Commercialization (IRDC)
publishDate 2007
url http://ir.uitm.edu.my/id/eprint/13028/1/AJ_WAN%20MANSOR%20MAHMOOD%20SMRJ%2007%201.pdf
http://ir.uitm.edu.my/id/eprint/13028/
https://smrj.uitm.edu.my/
_version_ 1685648394579607552
score 13.211869

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