Question

What are the motivations for bank mergers and acquisitions? Explain how these may affect bank value.

Please explain. Thank you

Answer 1

Motivations for Bank Mergers and Acquisitions are -

1) these help the banks which are facing growth problems or at the edge of insolvency or dissolution as the bank can merge or get acquired with the large bank. it will help the both banks as the bank which acquires the other bank can expand its business as it aquires all the assets of the other bank. and the bank which was at the edge of closure can have a fresh start and can generate profit easily.

2) secondly it benefits both the banks by merging and acquisition to tackle the competetion against the large bank.

ultimately, mergers and aquisitions add up to the bank value of the bank acquiring and merging as it will have more assets and customers of the bank acquired and merged. and will lead to the expansion and growth of the bank.