Influence of Mergers and Acquisitions of Commercial Banks and its Existing Problems

Abstract

Nowadays, more and more banks are carrying out mergers and acquisitions activities in full swing to expand their business scope and enhance their competitiveness in seizing the market. The main research issue is the impact of China's commercial bank mergers and acquisitions on bank performance. My experience test primarily consists of two parts. First of all, I need to access industry-level data, which comes from the financial statements of thirty banks in the last ten years. Then, use STATA to collect these data and evaluate the impact of their liquidity, size, and leverage on their operating performance, which is ROA and ROE. This study uses the variance expansion factor VIF to detect whether there is multicollinearity between variables. The study found that there is no multicollinearity between the variables selected in this paper. This study also used the Hosman test and F test to get the result of using the fixed-effects model to perform regression on the model. This study also used STATA to conduct a paired sample t-test and found that mergers and acquisitions have a significant correlation with the Bank's ROA and ROE, and mergers and acquisitions do have a positive effect on the bank's performance. As for the importance of this test, because mergers and acquisitions between commercial banks should give full play to their advantages and effectively share resources. However, the reality is not as good as we thought. Therefore, studying this topic will help the financial industry allocate resources, and it will also help some undervalued banks restructure the financial market.