Bank Consolidation and Performance: The Argentine Experience
IMF Working Papers, August 1, 2004
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- Canonical URL
- Bank Consolidation and Performance: The Argentine Experience
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Bibliographic details
- Published: August 1, 2004
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451856927.001
Study scope and dataset
- Examines a large panel of more than 100 banks from Argentina.
- Sample period: between December 1995 and December 2000, described as a period of heavy bank consolidation and relative calm.
- Pages: 32.
Main empirical findings
- Overall effect of bank consolidation on bank performance is positive and significant.
- Bank returns increase with consolidation.
- Insolvency risk is reduced with consolidation.
Effects by type of corporate action
- Mergers and privatizations:
- Suggested to have a beneficial effect on bank returns.
- Reduce a bank's insolvency risk significantly.
- Acquisitions:
- Effect on return on equity is negative.
- Do not seem to have any effect on risk-adjusted returns.
- Insolvency risk is unrelated to bank acquisitions.
Performance and risk indicators referenced
- Bank return (general returns) — increases with consolidation.
- Return on equity — negatively affected by acquisitions.
- Risk-adjusted returns — acquisitions show no apparent effect.
- Insolvency risk — reduced by consolidation generally; significantly reduced through mergers and privatization; unrelated to acquisitions.
International Monetary Fund. "Bank Consolidation and Performance: The Argentine Experience", IMF Working Papers 2004, 149 (2004), DOI: https://doi.org/10.5089/9781451856927.001