Mergers in the Banking Industry

Mergers & Acquisitions in Banks

INTRODUCTION

The mergers Bank currently issue on the table across the country, mainly in the financial, political and economic analysts, although, with mergers which seeks to strengthen the structures but with a view to financial benefit the user (which to date no institution has achieved 100%), according to financial analysts.

When we talk about fusion, we must keep in mind that this is when two or more come together companies , previously independent, in a single organization . This fusion usually are produced by the search for economies of scale or monopolistic advantages, in the first case are an expression of the process of integration horizontally or vertically between independent companies, seeking greater efficiency in their processes productive, in the second case can be considered as a way of controlling the markets deeper and more organic to the formation of cartels. One purpose to merge 2 or more banks is in order to try to reduce their costs of processing (operating expenses and expenses of personnel). Expand your potential business without performing additional technical efforts, whenever it will feature a portfolio of services expanded obtained from the combination of the instruments of both entities.

It is notable that the merger seeks to maintain the portfolio of customers and in turn try to capture them, to strengthen in the merger, with this we can say that before a bank to achieve was to attract more customers by year after year, in exchange with the merger may improve this aspect to attract stakeholders to invest in the products and services offered by institutions banking. Mergers are not be a miracle solution to bank inefficiencies, of course, if there is no reliable strength in the organizations that may wish to merge would target only the sum of inefficiencies in an organization.

The bank merger becomes more important in the wake of the crisis, financial approximately 07 years ago, when they began to settle a number of banks .

The financial emergency board by then, decided to create a law of bank mergers that was in the year 1996, as a stimulus for the banking sector in view of what has already happened, although many institutions decide to merge to perform faster and effective expansion plans, increasing its network of agencies and its portfolio of loans and deposit with a minimum investment and the exploitation of economies of scale optimizing economic, human, physical and technological resources, with a consequent impact on supply of financial services and following their profitability and solvency.

The bank merger taking place in America is emerging as a solution to the problems of institutions and the system financially. These mergers are good for strengthening the financial system which is so deteriorated and this makes some of about seven, this is even more noticeable in a small market in America when compared with other countries. As we can see, mergers also have their disadvantages, and lowering labor liabilities (Massive Layoffs), depending on like this the economy of the ...