Mergers and acquisitions the Turkish banking sector profitable growth analysis

ABSTRACT With the globalization of competition, company mergers and takeovers, which accelerated especially in the 90s, have turned into a survival strategy preferred particularly by multinational companies. Company mergers and takeovers, which are mostly apparent in the USA today, have become a rapidly spreading trend in our country, especially in the finance sector. The main reason for company mergers is the companies' will to benefit from the synergy that will occur with the merging of different parts of the companies. The need for a strong and healthy financial system in developing countries is another catalyst for this trend. The mergers and takeovers, which have accelerated in parallel to the completion of the structuring of globalization, are mostly apparent in the banking sector. The main object of bank mergers can be summarized as a more efficient performance of the emerging bank in terms of operation, increase in the market share and increase in value. The subject of this study is to determine whether the recent bank mergers in Turkey have provided a profitable growth for the banks or not. Beside this, change in the Capital Structure - with the effect of Basel Accord - after the merger period is tried to be measured. First of all, using the ratio analysis to test this situation, the performances of the merged banks were examined for periods of 3 years before and after merging in terms of their assets size, the size of the credits they have provided, the deposit volumes they have collected and the number of branches and staff. On the other hand, in the analysis of profitability, the return on assets and return on equity ratios they obtained in periods of 3 years before and after merging were examined. In order to examine the development in their capital, capital adequacy ratios were examined.