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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| Format: | Article |
| Language: | English |
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Institute of Research, Development and Commercialization (IRDC)
2007
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| Online Access: | https://ir.uitm.edu.my/id/eprint/13028/ |
| _version_ | 1848803220544028672 |
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| author | Mahmood, Wan Mansor Mohamad, Rashidah |
| author_facet | Mahmood, Wan Mansor Mohamad, Rashidah |
| author_sort | Mahmood, Wan Mansor |
| building | UiTM Institutional Repository |
| collection | Online Access |
| 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. |
| first_indexed | 2025-11-14T21:35:47Z |
| format | Article |
| id | uitm-13028 |
| institution | Universiti Teknologi MARA |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-14T21:35:47Z |
| publishDate | 2007 |
| publisher | Institute of Research, Development and Commercialization (IRDC) |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | uitm-130282016-06-15T03:14:06Z https://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 smrj 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 https://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. (2007) Social and Management Research Journal (SMRJ) <https://ir.uitm.edu.my/view/publication/Social_and_Management_Research_Journal_=28SMRJ=29.html>, 4 (1). pp. 77-86. ISSN 1675-7017 https://smrj.uitm.edu.my/ |
| 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 |
| title | 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_short | 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 |
| topic | Bank mergers Special classes of banks and financial institutions Malaysia |
| url | https://ir.uitm.edu.my/id/eprint/13028/ https://ir.uitm.edu.my/id/eprint/13028/ |