Post-Merger Performance in Financial Service Industry: A Case of the Republic of Serbia

Main Article Content

Dejan Erić
Ivan Stošić
Vuk Dapčević

Abstract

The main objective of this paper is to analyze key financial performance indicators in certain financial institutions after mergers and acquisitions (M&A) with foreign organizations in the Republic of Serbia. The main actors in these M&A activities were banks. Our research and analysis covers the period from 2002 when M&A processes were intensified by the end of 2017. The results obtained indicate that the arrival of foreign banks led to the consolidation of the Serbian financial services market. Numerous strategic advantages have been achieved and lot of weaknesses from the paste have been eliminated. However, when analyzing the most important profitability ratios (ROA, ROE, NIM), a slightly different picture is obtained. Compared with the banks that came through greenfield investments and a group of domestic banks, this group of banks made slightly lower performances.

Article Details

Section

Articles

References

Alsharairi, M. and Salama (2012). “Does high leverage impact earnings management? Evidence from non-cash mergers and acquisitions”. Journal of Financial and Economic Practice 12(1): 17-33.

Alsharairi, M. (2015). The Post-merger Performance of the European M&As: Does Pre-merger Earnings Management Matter? Corporate Ownership and Control 13(1):786-797 · January 2015

Altunbas Y., Ibáñez D.M.. (2004) Mergers And Acquisitions and Bank Performance in Europe: The Role Of Strategic Similarities, ECB working paper

Berger, A.N., Humphrey, D.B. (1997) Efficiency of Financial Institutions: International Survey and Directions for Future Research, EJOR 98(2)

Barjaktarović L., Paunović M. 2012. Komparativna analiza bankarskog sektora u zemljama centralne i istočne Evrope sa osvrtom na Srbiju. Anali Ekonomskog fakulteta 48, (28): 83-96

Bonin J. P., Iftekhar H. and Wachtel P. (2004) Bank performance, efficiency and ownership in transition countries, Journal of Banking and Finance 29 (1):pp. 31–53

Dimić, M., Barjaktarović L. (2017). Vlasnička transformacija bankarskog sektora u zemljama Jugoistočne Evrope, Bankarstvo, 2017, vol. 46, br. 1

Erić D., Đukić, M. (2012). Finansijska tržišta u uslovima krize, Institut ekonomskih nauka i Beogradska bankarska akademija, Beograd

Erić D., Stošić, I. (2012). †žDevelopment of the European Financial System: Challenges for the Balkan Countries Integration Process” Chapter 6 in †žEureopan Integration Process in Western Balkan Countries”, Faculty of Economics of the University of Coimbra, Coimbra, pp. 114-143

Erić D., Stošić, I. (2012). Korporativno restrukturiranje, Čigoja štama, Institut ekonomskih nauka i Beogradska bankarska akademija, Beograd

Erić D., Stošić, I., Dapčević V. (2018). Post-merger Porfitability of Greek Banks in the Serbian Banking Market, Western Balkans Economies in EU Integration: past, present and future, CEMAFI International Association 979-10-96557-18-9, pp. 63-91

Estrin S., Hanousek J., Kocenda E. and Svejnar J. (2009) Effects of privatization and ownership in transition economies. Policy research working paper 4811, The World bank, Washington, D.C. (U.S.)

Ferrier WJ, MacFhionnlaoich C, Smith K and Grimm C (2013) The impact of performance

distress on aggressive competitive behavior: A reconciliation of competing views. Managerial and Decision Economics 23: 301-316.

Janjić S., Mr Lukić Lj. (2009) Marketing menadžment sinergijom u fuzijama i akvizicijama banaka. Ekonomika, 2009., broj 1-2 ,144-157

Hagendorff, J., Collins, M., & Keasey, K. (2008). Investor protection and the value effects of bank merger announcements in Europe and the US. Journal of Banking and Finance, 32, 1333-1348.

Huizinga, H.P., Nelissen, J.H.M., Vennet, R. Vander, (2001) †žWorking Paper Efficiency Effects of Bank Mergers and Acquisitions“, Tinbergen Institute Discussion Paper, No. 01-088/3, on-line: https://www.econstor.eu/bitstream/10419/85871/1/01088.pdf

Kama, U. (2007). Bank Post Consolidation, Issues and Challenges in Malaysia and India: Lessons of Experience. Bullion, Central Bank Of Nigeria, Abuja, 31(4), 36-47.

Kyriazopoulos, G., Petropoulos D. (2011) Does the cross border mergers and acquisitions of the Greek banks in the Balkan area affect on the course of profitability efficiency and liquidity indexes of them?, 3rd EBEEC

Kyriazopoulos, G. and Drymbetas, E. (2015), Do domestic banks Mergers and Acquisitions Still Create Value? Recent Evidence from Europe, Journal of Finance and Bank Managemen, June, Vol. 3, No. 1, pp. 100-116

Kraft E., Hofler R., Payne J. (2006) Privatization, foreign bank entry and bank efficiency in Croatia: a Fourier-flexible function stochastic cost frontier analysis, Applied Economics, Taylor & Francis Journals, vol. 38(17), pp. 2075-2088.

Коntić J., КоnÑ‚ić Lj. (2009) Merdžeri i akvizicije u bankarskom sektoru, Bankarstvo, 2009, br. 5-6

Ljumović I., Marinković S. (2016) Aktuelna finansijska kriza i poslovne perspektive grčkih banaka u Srbiji, Bankarstvo, 2016, vol. 45, br. 4

Ljumović I., Cvijanović J., Lazić J. (2015) Specifičnosti poslovanja banaka u Srbiji u funkciji načina ulaska na tržište, ERAZ konferencija 2015: Održivi ekonomski razvoj – savremeni i multidisciplinarni pristupi

Marinković S. (2007) Stanje i dinamika stepena koncentracije u bankarskom sektoru Srbije. Teme 33 (2): pp. 283–299

Marinković S., Ljumović I. 2011. Efekti vlasničke transformacije bankarskog sektora Srbije - teorijska i empiriska analiza. Ekonomske teme 35, (1), 198-208

Narodna banka Srbije (NBS) Finansijski izveštaji banaka: https://www.nbs.rs/internet/cirilica/50/50_5.htmlwww.nbs.rs

Savović S. (2016) The Post-Acquisition Performance of Acquired Companies: Evidence from the Republic of Serbia, Economic Annals, Volume LXI, No. 209 / April – June 2016, 79-104

Vennet, R.V. (1996) The Efect of Mergers and Acquisition on Efficiencz and Profitability of EC Credit Institutions, Journal of Banking and Finance 20, pp. 1531-1558