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NOTE: Since 2009 the title of the International Journal of Entrepreneurship Education (IJEE) has been changed to the title above.  ISSN numbers: IJEE 1649-2269 and IRE 2009-2822

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#1550 - Mergers Between Savings Banks. The Solution for Improving Risk in the Spanish Banking Sector

IRE Vol 15: Issue 1, 2017 (6 of 6 Papers Publishing by March 31st)

Author(s): Vicente Pina, Lourdes Torres, Patricia Bachiller (University of Zaragoza, Spain)

The objective of this paper is to study the changes in the performance of savings banks and the factors that influence the risk of these entities. The paper presents empirical evidence about the effect of mergers of savings banks, not only on performance but also on risk in the Spanish banking sector. First, in order to study the effectiveness of mergers we compare the economic-financial characteristics of savings banks before and after merging by carrying out the Mann-Whitney and Wilcoxon two-sample paired signed rank tests. Second, we carry out a multivariate regression to study risk determinants. Our findings indicate that the performance of savings banks has not improved from 2009 to 2012. Moreover, the size of the merged entity is directly related to the risk of the resulting entity, which denotes that mergers are not effective in obtaining a less risky banking sector.

Keywords: savings banks, risk, performance, mergers, Spain

JEL: G.21, G.34, G.32