The last decade of the 20th century was a decade of enormous changes in the banking sector worldwide. If one compares the largest banks of the world in 1995 with those at the end of 2000 it is obvious to see that many changes have happened in recent years: In 1995 all top five banks were from Japan (total assets in million USD in brackets): Dai-Ichi Kangyo Bank (626,171), Sumitomo Bank (617,053), Sakura Bank (607,245), Sanwa Bank (600,111) and Fuji Bank (587,154.
At the end of 2000 the top five banks ranked by total assets were: Sumitomo Mitsui Banking Corp., Japan (958,189), CitiGroup, USA (902,210), Deutsche Bank Group, Germany (882,577), HSBC Holdings, U.K. (673,814) and Bayerische HypoVereinsbank, Germany (672,720). These newly-formed banking groups arose from mergers and acquisitions (M&As) and therefore they are good examples for all the M&As that have taken place in the banking sector worldwide in recent years.
In this scientific paper the M&A activity in the banking sector is being analysed on a global basis and, where appropriate, with a special focus on European activities. To do so, the following procedure has been chosen: After the presentation of typical patterns of consolidation the main causes of consolidation and risks arising from M&As will be examined. Afterwards the economical results of the M&A process will be analysed to give a conclusion and an estimation on future activities
Inhaltsverzeichnis (Table of Contents)
- 1 The global bank merger wave
- 1.1 Worldwide overview
- 1.2 European merger and acquisition activity
- 1.3 Development of concentration in European countries
- 2 Typical patterns of consolidation
- 3 Main causes of consolidation
- 3.1 Cost reduction
- 3.2 Revenue enhancement
- 3.3 Forces encouraging consolidation
- 4 Risks of consolidation
- 4.1 Pricing of the operation
- 4.2 Underestimation of post-merger management
- 4.3 Cultural differences
- 5 Measurement of economical results of M&As
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This homework analyzes the global wave of mergers and acquisitions (M&As) in the banking sector during the late 20th century, with a particular focus on European activities. It examines typical consolidation patterns, the main driving forces behind these mergers, and the inherent risks involved. The analysis also explores the economic outcomes of M&As to provide an assessment of future trends.
- Global and European M&A activity in the banking sector
- Typical patterns of consolidation (domestic vs. international, within vs. across industries)
- Main causes of consolidation (cost reduction, revenue enhancement, external pressures)
- Risks associated with bank mergers and acquisitions
- Economic results of M&A activity
Zusammenfassung der Kapitel (Chapter Summaries)
Chapter 1: The global bank merger wave introduces the significant changes in the banking sector during the 1990s, highlighting a substantial increase in M&A activity worldwide and in Europe. It presents data on the number and value of transactions, showing a dramatic rise towards the end of the decade. The chapter also defines mergers and acquisitions and distinguishes between them.
Chapter 2: Typical patterns of consolidation categorizes M&A transactions into four groups based on geographical location and industry. It reveals that the majority of bank M&As within the EU were domestic, with a significant proportion involving banks from Germany, Italy, France, and Austria. The chapter also discusses examples of domestic and international mergers and acquisitions.
Chapter 3: Main causes of consolidation explores the primary motivations behind bank M&As. It focuses on the pursuit of increased profitability through cost reduction and revenue enhancement, and it also discusses external factors that encourage consolidation. The data presented in this chapter is derived from interviews with industry experts.
Schlüsselwörter (Keywords)
Mergers and Acquisitions (M&As), banking sector, consolidation, profitability, cost reduction, revenue enhancement, European Union, global financial industry, domestic and international mergers, risk assessment, economic results.
- Citar trabajo
- Matthias Schubert (Autor), 2002, Mergers and Acquisitions (M&As) in the Banking Sector, Múnich, GRIN Verlag, https://www.grin.com/document/106140
