Du Pont analysis of a bank merger and acquisition between Laiki bank from Cyprus and Marfin investment group from Greece Is there an increase of profitability of the new bank?
Part of : MIBES Transactions : international journal ; Vol.5, No.2, 2011, pages 30-49
Issue:
Pages:
30-49
Abstract:
In this paper, we try to investigate how the acquisition of the Cypriot financial institution Laiki Bank with the Greek Marfin Investment Group has affected the profitability of the new bank that created after the merge. In order to do so we have selected data from the financial statements of the banks for four years before the acquisition and four years after until today. In order to achieve our goals in this paper we have measured the ratios of ROE, ROA applying the DuPont ratio analyses, which have been demonstrated with the aim of graphs to show the change periodically. In the first chapter we give some definitions about banks mergers and acquisitions and the advantages and disadvantages of them. In the second chapter we describe how we can measure the profitability of a bank using the ratios of ROE, ROA and the Dupont Analysis. In the third chapter we report the historical elements, facts and financial statements about the two banks Laiki and Marfin before and after the merge. Finally we measure the ROE and ROA ratios before and after the merge between those two banks and try to find out if these two ratios have improved after the merge or not, so we can justify the merge. The results have shown magnificent growth of the new bank MarfinLaiki Bank it's self from the first year of the acquisition and year-by-year even bigger growth.
Subject (LC):
Keywords:
mergers, acquisitions, restructuring, banks, other depository institutions, micro finance institutions, mortgages
Notes:
Περιέχει πίνακες, διαγράμματα και βιβλιογραφία
