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/ http://ir.uitm.edu.my/id/eprint/13028/1/AJ_WAN%20MANSOR%20MAHMOOD%20SMRJ%2007%201.pdf

id	uitm-13028
recordtype	eprints
spelling	uitm-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, 4 (1). pp. 77-86. ISSN 1675-7017
repository_type	Digital Repository
institution_category	Local University
institution	Universiti Teknologi MARA
building	UiTM Institutional Repository
collection	Online Access
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/ http://ir.uitm.edu.my/id/eprint/13028/1/AJ_WAN%20MANSOR%20MAHMOOD%20SMRJ%2007%201.pdf
first_indexed	2023-09-18T22:49:42Z
last_indexed	2023-09-18T22:49:42Z
_version_	1777417461505720320

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

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