A study of the motives for restructuring commercial banks
A study of the motives for restructuring commercial banks

Summary/Abstract: The aim of the article is to analyse the main motives for restructuring commercial banks. It investigates the M&A transactions in the Ukrainian banking sector and changes in its trends and assesses the level of banking market concentration and its dynamics in 2010–2016 by calculating the Herfindahl-Hirschman Index based on the volume of bank assets. The main theories that explain the reasons for restructuring commercial banks with the intention of their integration are discussed.The effectiveness of bank mergers is evaluated with the example of PJSC ‘Ukrsotsbank’and PJSC ‘UniCreditbank’. The financial restructuring mechanism is presented schematically as asequential plan of action of a commercial bank. The author concludes that success of M&A transactions usually results from a synergy effect, and lack thereof – from irrational actions of management (agency theory of free cash flow) or over estimating the value of the target company (hubris theory). The research methods used in the paper include economic analysis and a critical review of the literature.

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