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Value Creation in Vietnamese Bank Mergers and Acquisitions

In: Recent Developments in Vietnamese Business and Finance

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  • Tan Khoa Duong

Abstract

This chapter seeks evidence of the value creation associated with bank mergers and acquisitions in Vietnam. Accounting-based approach is used to test the value-maximizing hypothesis. 1-year pre-merger performance indicators of acquiring banks are directly compared to 3-year post-merger performance indicators of the consolidated banks to find out sources of value creation. This study finds that Vietnamese acquiring banks, 3 years after the mergers, can increase their deposit market share and credit market share but cannot increase their market power in the setting price. In terms of efficiency gains, this study finds strong evidence to show that the consolidated banks can improve their profitability measured by three measures: return on asset (ROA), return on equity (ROE), and net margin on assets. Except for the improvement in operating efficiency ratio, other efficiency measures are not statistically different from zero.

Suggested Citation

  • Tan Khoa Duong, 2021. "Value Creation in Vietnamese Bank Mergers and Acquisitions," World Scientific Book Chapters, in: Dong Phong Nguyen & Xuan Vinh Vo & Viet Tien Ho & Mai Dong Tran (ed.), Recent Developments in Vietnamese Business and Finance, chapter 7, pages 149-170, World Scientific Publishing Co. Pte. Ltd..
    • Handle: RePEc:wsi:wschap:9789811227158_0007
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    More about this item

    Keywords

    Vietnam; Business; Finance; Economy; Economics; Banking; Gender Equality; Management; Business Research;
    All these keywords.

    JEL classification:

    • F2 - International Economics - - International Factor Movements and International Business
    • F3 - International Economics - - International Finance
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance

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