IDEAS home Printed from https://ideas.repec.org/a/seb/journl/v3y2005i1p121-144.html
   My bibliography  Save this article

Merging activity in the Greek Banking System: A Financial Accounting Perspective

Author

Listed:
  • Nikolaos Mylonidis

    (University of Ioannina)

  • Ioanna Kelnikola

    (University of Ioannina)

Abstract

The purpose of this paper is to assess the overall financial performance and value implications of recent mergers and acquisitions in the Greek banking system. The operating performance (OP) methodology is based on accounting data and observes the pre- and post-merger financial performance of banks. The event study approach utilizes stock returns of acquiring and target banks around the announcement date of the merger to determine the presence of abnormal returns. Consistent with the international literature, OP results do not provide much evidence of performance gains resulting from bank mergers. Nevertheless, merged banks seem to outperform the group of non-merging banks. The event study approach indicates that mergers create value on a net aggregate basis.

Suggested Citation

  • Nikolaos Mylonidis & Ioanna Kelnikola, 2005. "Merging activity in the Greek Banking System: A Financial Accounting Perspective," South-Eastern Europe Journal of Economics, Association of Economic Universities of South and Eastern Europe and the Black Sea Region, vol. 3(1), pages 121-144.
    • Handle: RePEc:seb:journl:v:3:y:2005:i:1:p:121-144
    as

    Download full text from publisher

    File URL: http://www.asecu.gr/Seeje/issue04/mylonidis.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Jalal D. Akhavein & Allen N. Berger & David B. Humphrey, "undated". "The Effects of Megamergers on Efficiency and Prices: Evidence from a Bank Profit Function," Finance and Economics Discussion Series 1997-09, Board of Governors of the Federal Reserve System (U.S.), revised 10 Dec 2019.
    2. Manolis Kavussanos & Everton Dockery, 2001. "A multivariate test for stock market efficiency: the case of ASE," Applied Financial Economics, Taylor & Francis Journals, vol. 11(5), pages 573-579.
    3. H.P. Huizinga & J.H.M. Nelissen & R. Vander Vennet, 2001. "Efficiency Effects of Bank Mergers and Acquisitions," Tinbergen Institute Discussion Papers 01-088/3, Tinbergen Institute.
    4. Gregorios Siourounis, 2002. "Modelling volatility and testing for efficiency in emerging capital markets: the case of the Athens stock exchange," Applied Financial Economics, Taylor & Francis Journals, vol. 12(1), pages 47-55.
    5. Dimitris K. Christopoulos & Efthymios G. Tsionas, 2001. "Banking Economic Efficiency In The Deregulation Period: Results From Heteroscedastic Stochastic Frontier Models," Manchester School, University of Manchester, vol. 69(6), pages 656-676, December.
    6. Amihud, Yakov & DeLong, Gayle L. & Saunders, Anthony, 2002. "The effects of cross-border bank mergers on bank risk and value," Journal of International Money and Finance, Elsevier, vol. 21(6), pages 857-877, November.
    7. Karafolas, S. & Mantakas, G., 1996. "A note on cost structure and economies of scale in Greek banking," Journal of Banking & Finance, Elsevier, vol. 20(2), pages 377-387, March.
    8. Jensen, Michael C, 1986. "Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers," American Economic Review, American Economic Association, vol. 76(2), pages 323-329, May.
    9. Stengos, Thanasis & Panas, E, 1992. "Testing the Efficiency of the Athens Stock Exchange: Some Results from the Banking Sector," Empirical Economics, Springer, vol. 17(2), pages 239-252.
    10. Anand S. Desai & Roger D. Stover, 1985. "Bank Holding Company Acquisitions, Stockholder Returns, And Regulatory Uncertainty," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 8(2), pages 145-156, June.
    11. Nicholas Apergis & Anthony Rezitis, 2004. "Cost structure, technological change, and productivity growth in the greek banking sector," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 10(1), pages 1-15, February.
    12. Tsionas, Efthymios G. & Lolos, Sarantis E. G. & Christopoulos, Dimitris K., 2003. "The performance of the Greek banking system in view of the EMU: results from a non-parametric approach," Economic Modelling, Elsevier, vol. 20(3), pages 571-592, May.
    13. repec:bla:manchs:v:69:y:2001:i:6:p:656-76 is not listed on IDEAS
    14. Pilloff, Steven J, 1996. "Performance Changes and Shareholder Wealth Creation Associated with Mergers of Publicly Traded Banking Institutions," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 28(3), pages 294-310, August.
    15. Houston, Joel F. & Ryngaert, Michael D., 1994. "The overall gains from large bank mergers," Journal of Banking & Finance, Elsevier, vol. 18(6), pages 1155-1176, December.
    16. Kaplan, Steven N. (ed.), 2000. "Mergers and Productivity," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226424316, August.
    17. Athanasios Noulas, 1997. "Productivity growth in the Hellenic banking industry: state versus private banks," Applied Financial Economics, Taylor & Francis Journals, vol. 7(3), pages 223-228.
    18. Cybo-Ottone, Alberto & Murgia, Maurizio, 2000. "Mergers and shareholder wealth in European banking," Journal of Banking & Finance, Elsevier, vol. 24(6), pages 831-859, June.
    19. Christopoulos, Dimitris K. & Lolos, Sarantis E. G. & Tsionas, Efthymios G., 2002. "Efficiency of the Greek banking system in view of the EMU: a heteroscedastic stochastic frontier approach," Journal of Policy Modeling, Elsevier, vol. 24(9), pages 813-829, December.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Győrffy, Dóra, 2014. "Válság és válságkezelés Görögországban. A puha költségvetési korlát szerepe a gazdasági összeomlásban [Crisis and crisis management in Greece. The role of soft budget constraints in the economic co," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(1), pages 27-52.
    2. Subhash C. Ray & Shilpa Sethia, 2022. "Nonparametric measurement of potential gains from mergers: an additive decomposition and application to Indian bank mergers," Journal of Productivity Analysis, Springer, vol. 57(2), pages 115-130, April.
    3. George Mountis, 2012. "Banks’ Domestic & Cross-border M&As: Where Can They Go Wrong?," Cyprus Economic Policy Review, University of Cyprus, Economics Research Centre, vol. 6(1), pages 39-67, June.
    4. Reddy, Kotapati Srinivasa & Nangia, Vinay Kumar & Agrawal, Rajat, 2013. "Indian economic-policy reforms, bank mergers, and lawful proposals: The ex-ante and ex-post ‘lookup’," Journal of Policy Modeling, Elsevier, vol. 35(4), pages 601-622.
    5. Anastasios KARAMANOS & George BAKATSELOS & Roena AGOLLI, 2015. "Abnormal Stock Market Returns to Announcements of M&A Banking Deals in Greece 1996-2013," Management Dynamics in the Knowledge Economy, College of Management, National University of Political Studies and Public Administration, vol. 3(2), pages 317-338, June.
    6. Rezitis, Anthony N., 2008. "Efficiency and productivity effects of bank mergers: Evidence from the Greek banking industry," Economic Modelling, Elsevier, vol. 25(2), pages 236-254, March.
    7. Reddy, K. Srinivasa & Nangia, Vinay Kumar & Agrawal, Rajat, 2012. "Corporate mergers and financial performance: A new assessment of Indian cases," MPRA Paper 60425, University Library of Munich, Germany, revised 2013.
    8. Giorgos Argitis & Stella Michopoulou, 2013. "Studies in Financial Systems No 4 Financialization and the Greek Financial System," FESSUD studies fstudy04, Financialisation, Economy, Society & Sustainable Development (FESSUD) Project.
    9. Halkos, George E. & Tzeremes, Nickolaos G., 2013. "Estimating the degree of operating efficiency gains from a potential bank merger and acquisition: A DEA bootstrapped approach," Journal of Banking & Finance, Elsevier, vol. 37(5), pages 1658-1668.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Amel, Dean & Barnes, Colleen & Panetta, Fabio & Salleo, Carmelo, 2004. "Consolidation and efficiency in the financial sector: A review of the international evidence," Journal of Banking & Finance, Elsevier, vol. 28(10), pages 2493-2519, October.
    2. Giorgos Argitis & Stella Michopoulou, 2013. "Studies in Financial Systems No 4 Financialization and the Greek Financial System," FESSUD studies fstudy04, Financialisation, Economy, Society & Sustainable Development (FESSUD) Project.
    3. Tsionas, Efthymios G. & Papadakis, Emmanuel N., 2010. "A Bayesian approach to statistical inference in stochastic DEA," Omega, Elsevier, vol. 38(5), pages 309-314, October.
    4. Fotios Pasiouras & Aggeliki Liadaki & Constantin Zopounidis, 2008. "Bank efficiency and share performance: evidence from Greece," Applied Financial Economics, Taylor & Francis Journals, vol. 18(14), pages 1121-1130.
    5. Pasiouras, Fotios, 2008. "Estimating the technical and scale efficiency of Greek commercial banks: The impact of credit risk, off-balance sheet activities, and international operations," Research in International Business and Finance, Elsevier, vol. 22(3), pages 301-318, September.
    6. Halkos, George E. & Tzeremes, Nickolaos G., 2013. "Estimating the degree of operating efficiency gains from a potential bank merger and acquisition: A DEA bootstrapped approach," Journal of Banking & Finance, Elsevier, vol. 37(5), pages 1658-1668.
    7. A.I. Dimitras & K. Kosmidou & A.K. Apostolou, 2010. "Bank efficiency estimation and the change of the accounting standards: evidence from Greece," International Journal of Managerial and Financial Accounting, Inderscience Enterprises Ltd, vol. 2(1), pages 20-39.
    8. Altunbas, Yener & Marqués, David, 2008. "Mergers and acquisitions and bank performance in Europe: The role of strategic similarities," Journal of Economics and Business, Elsevier, vol. 60(3), pages 204-222.
    9. Berger, Allen N. & Demsetz, Rebecca S. & Strahan, Philip E., 1999. "The consolidation of the financial services industry: Causes, consequences, and implications for the future," Journal of Banking & Finance, Elsevier, vol. 23(2-4), pages 135-194, February.
    10. Dimitris Chronopoulos & Claudia Girardone & John Nankervis, 2013. "How Do Stock Markets in the US and Europe Price Efficiency Gains from Bank M&As?," Journal of Financial Services Research, Springer;Western Finance Association, vol. 43(3), pages 243-263, June.
    11. Asimakopoulos, Ioannis & Athanasoglou, Panayiotis P., 2013. "Revisiting the merger and acquisition performance of European banks," International Review of Financial Analysis, Elsevier, vol. 29(C), pages 237-249.
    12. Kiymaz, Halil, 2004. "Cross-border acquisitions of US financial institutions: Impact of macroeconomic factors," Journal of Banking & Finance, Elsevier, vol. 28(6), pages 1413-1439, June.
    13. Anthony N. Rezitis, 2006. "Productivity growth in the Greek banking industry: A non-parametric approach," Journal of Applied Economics, Universidad del CEMA, vol. 9, pages 119-138, May.
    14. Berger, Allen N., 2003. "The efficiency effects of a single market for financial services in Europe," European Journal of Operational Research, Elsevier, vol. 150(3), pages 466-481, November.
    15. Campa, Jose Manuel & Hernando, Ignacio, 2006. "M&As performance in the European financial industry," Journal of Banking & Finance, Elsevier, vol. 30(12), pages 3367-3392, December.
    16. Diaz, Belen Diaz & Olalla, Myriam Garcia & Azofra, Sergio Sanfilippo, 2004. "Bank acquisitions and performance: evidence from a panel of European credit entities," Journal of Economics and Business, Elsevier, vol. 56(5), pages 377-404.
    17. Neha Kalra & Shaveta Gupta & Rajesh Bagga, 2013. "A Wave of Mergers and Acquisitions: Are Indian Banks Going Up a Blind Alley?," Global Business Review, International Management Institute, vol. 14(2), pages 263-282, June.
    18. Chen, Zhian & Tan, Jianzhong, 2011. "Does bancassurance add value for banks? - Evidence from mergers and acquisitions between European banks and insurance companies," Research in International Business and Finance, Elsevier, vol. 25(1), pages 104-112, January.
    19. Claudia Champagne & Lawrence Kryzanowski, 2008. "The Impact of Past Syndicate Alliances on the Consolidation of Financial Institutions," Financial Management, Financial Management Association International, vol. 37(3), pages 535-570, September.
    20. Staikouras, Sotiris K., 2009. "An event study analysis of international ventures between banks and insurance firms," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 19(4), pages 675-691, October.

    More about this item

    Keywords

    Banks; M&As; Operating Performance; Event Study;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • G20 - Financial Economics - - Financial Institutions and Services - - - General

    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:seb:journl:v:3:y:2005:i:1:p:121-144. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Ms. Melina Petromelidou (email available below). General contact details of provider: https://edirc.repec.org/data/asecuea.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.