engleski

Target prediction in M&A activities in the Croatian banking sector

The main focus of this paper is to analyse the characteristics that trigger the likelihood of a bank being acquired on a sample of Croatian banks in the 2002-2014 period. Using logistic regression analysis, the authors tried to explore the characteristics of target banks that also disclose the motives for acquiring a particular bank. Therefore, various variables, typically found to be the most likely factors influencing bank takeovers, were introduced in the model. Specifically, variables ROA, ROE, capital adequacy ratio, growth rate, size, market share, ownership, leverage, capital to deposits ratio and net interest margin, were aimed to capture all important aspects of bank performance. The authors have employed Student's t - test that showed the significance of the size and net interest margin variable in predicting acquired banks, whereas the findings of the logit analysis show that higher values of net interest margin increase a bank's attractiveness as an acquisition target. These analyses were performed on both ranked and unranked data set. However, the authors did not find the evidence that rank transformation increases predictive power of the model.

Croatian banking market ; takeover targets ; logistic regression

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