Impact of bank mergers on shareholders’ wealth

Juma, Odero Naor and Wawire, Peter T. and Byaruhanga, John and Okaka, Ochieng and Odera, Odhiambo (2012) Impact of bank mergers on shareholders’ wealth. International Journal of Business and Social Research, 2 (6). pp. 162-177. ISSN 2164-2559

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Abstract

Mergers and acquisitions (M&As) perform a vital role in corporate finance in enabling firms achieve varied objectives and financial strategies. This study sought to comprehend the impacts that previous bank mergers have had on the shareholders’ wealth. The study location was in Kenya and it adopted the descriptive survey and correlation design in which the success of mergers was measured based on the objective oriented model using the annual accounts. The study computed the return on assets (ROA), return on equity (ROE) and the efficiency ratio (EFF) as indicators of shareholder value. The results of the commercial banks were analysed for a five-year period (2006-2010). The study reveals that mergers significantly influence shareholder value with banks that have undertaken mergers creating more value than those that have not. Such banks were ascertained to have posted better results than the overall sector.

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Item Type:	Article (Commonwealth Reporting Category C)
Refereed:	Yes
Item Status:	Live Archive
Additional Information:	http://www.ijbsr.org/index.php/journal-archive/177-v2n6a13. Open access journal. Authors retain copyright.
Faculty/School / Institute/Centre:	Historic - Faculty of Business and Law - School of Accounting, Economics and Finance (1 Jan 2011 - 30 Jun 2013)
Faculty/School / Institute/Centre:	Historic - Faculty of Business and Law - School of Accounting, Economics and Finance (1 Jan 2011 - 30 Jun 2013)
Date Deposited:	26 Jan 2013 02:17
Last Modified:	18 Aug 2014 07:02
Uncontrolled Keywords:	bank mergers, acquisitions, shareholders’ wealth, Kenya
Fields of Research (2008):	15 Commerce, Management, Tourism and Services > 1502 Banking, Finance and Investment > 150201 Finance 15 Commerce, Management, Tourism and Services > 1502 Banking, Finance and Investment > 150203 Financial Institutions (incl. Banking) 15 Commerce, Management, Tourism and Services > 1502 Banking, Finance and Investment > 150299 Banking, Finance and Investment not elsewhere classified
Fields of Research (2020):	35 COMMERCE, MANAGEMENT, TOURISM AND SERVICES > 3502 Banking, finance and investment > 350202 Finance 35 COMMERCE, MANAGEMENT, TOURISM AND SERVICES > 3502 Banking, finance and investment > 350204 Financial institutions (incl. banking) 35 COMMERCE, MANAGEMENT, TOURISM AND SERVICES > 3502 Banking, finance and investment > 350299 Banking, finance and investment not elsewhere classified
Socio-Economic Objectives (2008):	B Economic Development > 90 Commercial Services and Tourism > 9001 Financial Services > 900101 Finance Services
URI:	http://eprints.usq.edu.au/id/eprint/22257

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