Assessment of mergers and acquisitions in GCC banking

What is it about?

This study analyses the impact of mergers and acquisitions (M&A) on the performance of commercial banking in GCC countries through analysing a set of ratios. It contributes to the debate about whether mergers and acquisitions improve the performance of the GCC commercial banks. Seven financial ratios were used to investigate the impact of M&A on the operational performance of the merging banks. The sample consists of 42 commercial banks in the GCC countries. The results of financial ratios are mixed; where acquiring banks, target banks and banks that went through joint ventures show mixed results. It was not easy to establish a strong link between banks involved in M&A and the impact of mergers on their operating performance. However, the findings suggest that, on average, M&A activity did not have significant impact on operational performance of banks involved in this type of consolidation.

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