IDEAS home Printed from https://ideas.repec.org/a/mof/journl/ppr019g.html
   My bibliography  Save this article

Merger of Major Banks from the EVA Standpoint

Author

Listed:
  • Kazushi Kan

    (Belongs to the IT System Promotion Dept. of Sumitomo Mitsui Trust Bank, Limited and Former researcher, Policy Research Institute, Ministry of Finance)

  • Taro Ohno

    (The Lecturer of the Department of Economics, Management and Information Science of Onomichi City University and Former Senior Research Fellow, Policy Research Institute, Ministry of Finance)

Abstract

In this paper, I have reviewed the past 20 years (from FY1989 to FY2008) of performance of the major banks in Japan and the impact of mergers of the banks from the viewpoint of EVA (Economic Value Added), one of the management indices. As a result of my analysis, I first found that the EVA of the entire industry has been continuously negative except for around the middle of 2000s (from FY2005 to FY2007), which means the banking sector has not earned as much profit as expected by their shareholders up to this point. Also, although many major banks implemented mergers around the year 2000, not all the mergers have achieved successful result so far from the perspectives of EVA improvement. Based also on the result of empirical analysis, one of the important factors which contributed to the positive impact of merger is increase in loan market share, and it was proven that the higher loan market share the bank has acquired after the merger, the higher EVA it has achieved.

Suggested Citation

  • Kazushi Kan & Taro Ohno, 2012. "Merger of Major Banks from the EVA Standpoint," Public Policy Review, Policy Research Institute, Ministry of Finance Japan, vol. 8(5), pages 737-774, November.
    • Handle: RePEc:mof:journl:ppr019g
    as

    Download full text from publisher

    File URL: http://warp.ndl.go.jp/info:ndljp/pid/10248500/www.mof.go.jp/english/pri/publication/pp_review/ppr019/ppr019g.pdf
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hirofumi Fukuyama & William L. Weber, 2017. "Japanese Bank Productivity, 2007–2012: A Dynamic Network Approach," Pacific Economic Review, Wiley Blackwell, vol. 22(4), pages 649-676, October.
    2. Svetlana Grigorieva & Tatiana Petrunina, 2015. "The performance of mergers and acquisitions in emerging capital markets: new angle," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 26(4), pages 377-403, October.

    More about this item

    Keywords

    EVA; Bank; Merger;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mof:journl:ppr019g. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Policy Research Institute (email available below). General contact details of provider: https://edirc.repec.org/data/prigvjp.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.