Relevance of Bank Merger and Acquisition Activities on Bank‎Performance and Shareholders Wealth: A SystematicLiterature ‎Review and Future Research Scope

  • Authors

    • Diksha Chaturvedi Research Scholar, Amity Business School, Amity University Rajasthan, Jaipur, India
    • Dr. Apeksha Bhatnagar Assistant Professor, Amity Business School, Amity University Rajasthan, Jaipur, India
    • Dr. Neha Yadav Associate Professor, Rukmini Devi Institute of Advance Studies, New Delhi
    https://doi.org/10.14419/xrbr1815

    Received date: January 13, 2026

    Accepted date: February 9, 2026

    Published date: March 27, 2026

  • Bank Mergers and Acquisitions; Bank Performance; Shareholder Wealth; Systematic Literature ‎Review; Value Creation

  • Abstract

    This study reports a systematic literature study investigating the relevance of bank merger and ‎acquisition (M&A) activities in bank performance and wealth of shareholders. Using the ‎PRISMA framework, seventy-four peer-reviewed studies published between the year 2000 ‎and 2022 were identified from major academic databases, namely Scopus, ScienceDirect, ‎Google Scholar and Taylor & Francis. The work is a synthesis of empirical results related to ‎short-term market reactions, long-term operating performance, efficiency, risk, and value ‎creation linked to banking M&A. The results show that announcement effects are generally ‎positive for target banks and mixed for acquiring banks in terms of shareholder wealth. Long-‎term effects on performance seem inconclusive, with different institutional settings, ‎regulatory environments and methodological approaches showing varying results. Beyond ‎traditional financial outcomes, the review highlights emerging research on environmental, ‎social and governance disclosures, fintech integration and marketing synergies as having ‎important dimensions on the post-merger value creation. By synthesizing fragmented ‎evidence and detecting dominant patterns and gaps in research, the study adds ‎comprehensive view of banking M&A outcomes. The review further lays out organized ‎directions for future research with a strong emphasis on theory-driven, method-driven and ‎region-specific research, especially in emerging economies‎.

  • References

    1. Abdulazeez, D. A., Suleiman, O., & Yahaya, A. (2016). Impact of merger and acquisitions on the financial performance of Deposit Money Banks in Nigeria. Arabian Journal of Business and Management Review, 6(4), 1–5.
    2. Agag, G., Durrani, B. A., Shehawy, Y. M., Alharthi, M., Alamoudi, H., El-Halaby, S., & Abdelmoety, Z. H. (2023). Understanding the link be-tween customer feedback metrics and firm performance. Journal of Retailing and Consumer Services, 73, 103301. https://doi.org/10.1016/j.jretconser.2023.103301.
    3. Agbloyor, E.K. et al. (2012) “Domestic banking sector development and cross border mergers and acquisitions in Africa,” Review of Development Finance, 2(1), pp. 32–42. https://doi.org/10.1016/j.rdf.2012.01.003.
    4. Agliardi, E. et al. (2016) “Leverage changes and growth options in mergers and acquisitions,” Journal of Empirical Finance, 37, pp. 37–58. https://doi.org/10.1016/j.jempfin.2016.02.004.
    5. Ahunov, M.O. et al. (2019) “The impact of cross-border acquisitions on target banks’ performance in an institutionally poor environment: Ukraine’s takeover wave,” Post-communist Economies, 31(3), pp. 396–417. https://doi.org/10.1080/14631377.2018.1537739.
    6. Ali, F. and Sharma, A. (2019) “Pre-Merger and Post-Merger Operating Performance of SBI” (2019) International Journal of Recent Technology and Engineering, 8(3S2), pp. 25–31. https://doi.org/10.35940/ijrte.C1005.1083S219.
    7. Al-Khasawneh, J.A. and Essaddam, N. (2012) “Market reaction to the merger announcements of US banks: A non-parametric X-efficiency frame-work,” Global Finance Journal, 23(3), pp. 167–183. https://doi.org/10.1016/j.gfj.2012.10.003.
    8. Al-Khasawneh, J.A. et al. (2020) “Total productivity and cost efficiency dynamics of US merging banks: A non-parametric bootstrapped analysis of the fifth merger wave,” The Quarterly Review of Economics and Finance, 78, pp. 199–211. https://doi.org/10.1016/j.qref.2020.02.002.
    9. Altunbas, Y. and Marques, D. (2008) “Mergers and acquisitions and bank performance in Europe: The role of strategic similarities,” Journal of Eco-nomics and Business, 60(3), pp. 204–222. https://doi.org/10.1016/j.jeconbus.2007.02.003.
    10. Amel, D.F. et al. (2002) “Consolidation and efficiency in the financial sector: A review of the international evidence,” Journal of Banking and Fi-nance, 28(10), pp. 2493–2519. https://doi.org/10.1016/j.jbankfin.2003.10.013.
    11. Amihud, Y. et al. (2002) “The effects of cross-border bank mergers on bank risk and value,” Journal of International Money and Finance, 21(6), pp. 857–877. https://doi.org/10.1016/S0261-5606(02)00026-8.
    12. Antoniadis, I. et al. (2014) “Mergers and Acquisitions in the Greek Banking Sector: An Event Study of a Proposal,” Procedia. Economics and Fi-nance, 14, pp. 13–22. https://doi.org/10.1016/S2212-5671(14)00680-7.
    13. Asimakopoulos, I. and Athanasoglou, P.P. (2013) “Revisiting the merger and acquisition performance of European banks,” International Review of Financial Analysis, 29, pp. 237–249. https://doi.org/10.1016/j.irfa.2012.08.010.
    14. Baltas, K. et al. (2017) “Liquidity creation through efficient M&As: A viable solution for vulnerable banking systems? Evidence from a stress test under a panel VAR methodology,” Journal of Banking and Finance, 83, pp. 36–56. https://doi.org/10.1016/j.jbankfin.2017.05.005.
    15. Barros, C.P. and Williams, J. (2013) “The random parameters stochastic frontier cost function and the effectiveness of public policy: Evidence from bank restructuring in Mexico,” International Review of Financial Analysis, 30, pp. 98–108. https://doi.org/10.1016/j.irfa.2013.06.006.
    16. Becher, D. A. (2000). The valuation effects of bank mergers. Journal of Corporate Finance, 6(2), 189–214. https://doi.org/10.1016/s0929-1199(00)00013-4.
    17. Behr, A. and Heid, F. (2011) “The success of bank mergers revisited. An assessment based on a matching strategy,” Journal of Empirical Finance, 18(1), pp. 117–135. https://doi.org/10.1016/j.jempfin.2010.08.006.
    18. Berger, A.N. and Mester, L.J. (2003) “Explaining the dramatic changes in performance of US banks: technological change, deregulation, and dy-namic changes in competition,” Journal of Financial Intermediation, 12(1), pp. 57–95. https://doi.org/10.1016/S1042-9573(02)00006-2.
    19. Bernad, C. et al. (2010) “The effect of mergers and acquisitions on productivity: An empirical application to Spanish banking,” Omega, 38(5), pp. 283–293. https://doi.org/10.1016/j.omega.2009.07.005.
    20. Bessler, W.G. and Murtagh, J.P. (2002) “The stock market reaction to cross-border acquisitions of financial services firms: an analysis of Canadian banks,” Journal of International Financial Markets, Institutions and Money, 12(4–5), pp. 419–440. https://doi.org/10.1016/S1042-4431(02)00022-7.
    21. Blanco-Oliver, A. (2021) “Banking reforms and bank efficiency: Evidence for the collapse of Spanish savings banks,” International Review of Eco-nomics & Finance, 74, pp. 334–347. https://doi.org/10.1016/j.iref.2021.03.015.
    22. Bozos, K. et al. (2013) “Beta risk and price synchronicity of bank acquirers’ common stock following merger announcements,” Journal of Interna-tional Financial Markets, Institutions and Money, 27, pp. 47–58. https://doi.org/10.1016/j.intfin.2013.07.007
    23. Braggion, F. et al. (2021) “Value creating mergers: British bank consolidation, 1885–1925,” Explorations in Economic History, 83, p. 101422. https://doi.org/10.1016/j.eeh.2021.101422.
    24. Brealey, R.A. et al. (2019) “The effect of mergers on US bank risk in the short run and in the long run,” Journal of Banking and Finance, 108, p. 105660. https://doi.org/10.1016/j.jbankfin.2019.105660.
    25. Campa, J.M. and Hernando, I. (2006) “M&As performance in the European financial industry,” Journal of Banking and Finance, 30(12), pp. 3367–3392. https://doi.org/10.1016/j.jbankfin.2006.06.006
    26. Chen, Q. and Vashishtha, R. (2017) “The effects of bank mergers on corporate information disclosure,” Journal of Accounting and Economics, 64(1), pp. 56–77. https://doi.org/10.1016/j.jacceco.2017.05.003.
    27. Chen, Z. and Tan, J.-Z. (2011) “Does bancassurance add value for banks? – Evidence from mergers and acquisitions between European banks and insurance companies,” Research in International Business and Finance, 25(1), pp. 104–112. Available at: https://doi.org/10.1016/j.ribaf.2010.08.002.
    28. Chong, B.S. et al. (2006) “The wealth effect of forced bank mergers and cronyism,” Journal of Banking and Finance, 30(11), pp. 3215–3233. https://doi.org/10.1016/j.jbankfin.2005.12.004.
    29. Chronopoulos, D.K. et al. (2013) “How Do Stock Markets in the US and Europe Price Efficiency Gains from Bank M&As?,” Journal of Fi-nancial Services Research, 43(3), pp. 243–263. https://doi.org/10.1007/s10693-012-0132-4.
    30. Coccorese, P. and Ferri, G. (2020) “Are mergers among cooperative banks worth a dime? Evidence on efficiency effects of M&As in Italy,” Economic Modelling, 84, pp. 147–164. https://doi.org/10.1016/j.econmod.2019.04.002
    31. Cornaggia, J. and Li, J.Y. (2019) “The value of access to finance: Evidence from M&As,” Journal of Financial Economics, 131(1), pp. 232–250. https://doi.org/10.1016/j.jfineco.2018.09.003
    32. Cuesta, R. and Orea, L. (2002) “Mergers and technical efficiency in Spanish savings banks: A stochastic distance function approach,” Journal of Banking and Finance, 26(12), pp. 2231–2247. https://doi.org/10.1016/S0378-4266(01)00184-4.
    33. Cybo-Ottone, A. and Murgia, M. (2000) “Mergers and shareholder wealth in European banking,” Journal of Banking and Finance, 24(6), pp. 831–859. https://doi.org/10.1016/S0378-4266(99)00109-0.
    34. DeLong, G. (2001) “Stockholder gains from focusing versus diversifying bank mergers,” Journal of Financial Economics, 59(2), pp. 221–252. https://doi.org/10.1016/S0304-405X(00)00086-6
    35. Díaz, B.D. et al. (2004) “Bank acquisitions and performance: evidence from a panel of European credit entities,” Journal of Economics and Busi-ness, 56(5), pp. 377–404. https://doi.org/10.1016/j.jeconbus.2004.02.001
    36. Du, K. and Sim, N. (2016) “Mergers, acquisitions, and bank efficiency: Cross-country evidence from emerging markets,” Research in International Business and Finance, 36, pp. 499–510. https://doi.org/10.1016/j.ribaf.2015.10.005.
    37. Edeling, A., Srinivasan, S., & Hanssens, D. M. (2021). The marketing–finance interface: A new integrative review of metrics, methods, and find-ings and an agenda for future research. International Journal of Research in Marketing, 38(4), 857-876. https://doi.org/10.1016/j.ijresmar.2020.09.005
    38. Egger, P. and Hahn, F.R. (2010) “Endogenous bank mergers and their impact on banking performance,” International Journal of Industrial Organi-zation, 28(2), pp. 155–166. https://doi.org/10.1016/j.ijindorg.2009.07.007.
    39. Fields, L.P. et al. (2007) “Bidder returns in bancassurance mergers: Is there evidence of synergy?,” Journal of Banking and Finance, 31(12), pp. 3646–3662. https://doi.org/10.1016/j.jbankfin.2007.01.014
    40. Fraisse, H. et al. (2018) “The competitive effect of a bank megamerger on credit supply,” Journal of Banking and Finance, 93, pp. 151–161. https://doi.org/10.1016/j.jbankfin.2018.06.011.
    41. Gómez, F. (2015) “Failed bank takeovers and financial stability,” Journal of Financial Stability [Preprint]. https://doi.org/10.1016/j.jfs.2014.11.003.
    42. Gregory, A. and O’Donohoe, S. (2014) “Do cross border and domestic acquisitions differ? Evidence from the acquisition of UK targets,” Interna-tional Review of Financial Analysis, 31, pp. 61–69. https://doi.org/10.1016/j.irfa.2013.09.001
    43. Hagendorff, J. et al. (2008) “Investor protection and the value effects of bank merger announcements in Europe and the US,” Journal of Banking and Finance, 32(7), pp. 1333–1348. https://doi.org/10.1016/j.jbankfin.2007.11.008.
    44. Halkos, G. and Tzeremes, N.G. (2013) “Estimating the degree of operating efficiency gains from a potential bank merger and acquisition: A DEA bootstrapped approach,” Journal of Banking and Finance, 37(5), pp. 1658–1668. https://doi.org/10.1016/j.jbankfin.2012.12.009
    45. Halkos, G. et al. (2016) “Pre-evaluating technical efficiency gains from possible mergers and acquisitions: evidence from Japanese regional banks,” Review of Quantitative Finance and Accounting, 46(1), pp. 47–77. https://doi.org/10.1007/s11156-014-0461-5.
    46. Hart, J.A. and Apilado, V. (2002) “Inexperienced banks and interstate mergers,” Journal of Economics and Business, 54(3), pp. 313–330. https://doi.org/10.1016/S0148-6195(02)00063-2.
    47. Hassan, M., & Giouvris, E. (2021). Bank mergers: the cyclical behaviour of regulation, risk and returns. Journal of Financial Economic Policy, 13(2), 256–284. https://doi.org/10.1108/JFEP-03-2020-0043.
    48. Havrylchyk, O. (2004). Consolidation of the Polish banking sector: consequences for the banking institutions and the public. Economic Systems, 28(2), 125–140. https://doi.org/10.1016/j.ecosys.2004.03.004.
    49. Humphrey, D.B. and Vale, B. (2004) “Scale economies, bank mergers, and electronic payments: A spline function approach,” Journal of Banking and Finance, 28(7), pp. 1671–1696. https://doi.org/10.1016/j.jbankfin.2003.05.003
    50. Jagtiani, J. et al. (2016) “Community bank mergers and their impact on small business lending,” Journal of Financial Stability, 27, pp. 106–121. https://doi.org/10.1016/j.jfs.2016.10.005.
    51. Kasman, A. et al. (2010) “Consolidation and commercial bank net interest margins: Evidence from the old and new European Union members and candidate countries,” Economic Modelling, 27(3), pp. 648–655. https://doi.org/10.1016/j.econmod.2010.01.004
    52. Kilic, M. (2011) “Cross-Border Bank Acquisitions and Banking Sector Performance: An Empirical Study of Turkish Banking Sector,” Procedia - Social and Behavioral Sciences, 24, pp. 946–959. https://doi.org/10.1016/j.sbspro.2011.09.028.
    53. Kim, S.-S. (2021) “The valuation effects of hotel mergers,” Tourism Economics, 29(2), pp. 348–377. https://doi.org/10.1177/13548166211050475.
    54. Kiymaz, H. (2004) “Cross-border acquisitions of US financial institutions: Impact of macroeconomic factors,” Journal of Banking and Finance, 28(6), pp. 1413–1439. https://doi.org/10.1016/S0378-4266(03)00125-0.
    55. Kiymaz, H. (2009) “The impact of country risk ratings on U.S. firms in large cross-border acquisitions,” Global Finance Journal, 20(3), pp. 235–247. https://doi.org/10.1016/j.gfj.2009.09.001.
    56. Koerniadi, H. et al. (2015) “Cross-border mergers and acquisitions and default risk,” International Review of Financial Analysis, 42, pp. 336–348. https://doi.org/10.1016/j.irfa.2015.08.009
    57. Lanine, G. and Vennet, R.V. (2007) “Microeconomic determinants of acquisitions of Eastern European banks by Western European banks,” Eco-nomics of Transition, 15(2), pp. 285–308. https://doi.org/10.1111/j.1468-0351.2007.00288.x
    58. Mamun, A.A. et al. (2021) “Do regulatory bank mergers improve operating performance?” International Review of Economics & Finance, 73, pp. 152–174. https://doi.org/10.1016/j.iref.2020.12.036.
    59. Molyneux, P. et al. (2014) “‘Too systemically important to fail’ in banking – Evidence from bank mergers and acquisitions,” Journal of International Money and Finance, 49, pp. 258–282. https://doi.org/10.1016/j.jimonfin.2014.03.006
    60. Montgomery, H., Harimaya, K., & Takahashi, Y. (2014). Too big to succeed? Banking sector consolidation and efficiency. Journal of International Financial Markets Institutions and Money, 32, 86–106. https://doi.org/10.1016/j.intfin.2014.05.005.
    61. Papadimitri, P. et al. (2019) “Punished banks’ acquisitions: Evidence from the U.S. banking industry,” Journal of Corporate Finance, 58, pp. 744–764. https://doi.org/10.1016/j.jcorpfin.2019.07.014.
    62. Penas, M.F. and Unal, H. (2004) “Gains in bank mergers: Evidence from the bond markets,” Journal of Financial Economics, 74(1), pp. 149–179. https://doi.org/10.1016/j.jfineco.2003.05.004.
    63. Popovici, A. N., & Turliuc, D. G. (2014). The Effects Of Cross-Border Bank Mergers And Acquisitions On The Productivity Of Credit Institu-tions. DOAJ (DOAJ: Directory of Open Access Journals).
    64. Rahman, M. et al. (2016) “Value creation and appropriation following M&A: A data envelopment analysis,” Journal of Business Research, 69(12), pp. 5628–5635. https://doi.org/10.1016/j.jbusres.2016.03.070.
    65. Rashid, A. and Naeem, N. (2017) “Effects of mergers on corporate performance: An empirical evaluation using OLS and the empirical Bayesian methods,” Borsa Istanbul Review, 17(1), pp. 10–24. https://doi.org/10.1016/j.bir.2016.09.004
    66. Reddy, K.S. (2015) “The state of case study approach in mergers and acquisitions literature: A bibliometric analysis,” Future Business Journal, 1(1–2), pp. 13–34. https://doi.org/10.1016/j.fbj.2015.09.001
    67. Renneboog, L. and Vansteenkiste, C. (2019) “Failure and success in mergers and acquisitions,” Journal of Corporate Finance, 58, pp. 650–699. https://doi.org/10.1016/j.jcorpfin.2019.07.010.
    68. Rezitis, A.N. (2008) “Efficiency and productivity effects of bank mergers: Evidence from the Greek banking industry,” Economic Modelling, 25(2), pp. 236–254. https://doi.org/10.1016/j.econmod.2007.04.013.
    69. Scholtens, B. and De Wit, R. (2004) “Announcement effects of bank mergers in Europe and the US,” Research in International Business and Fi-nance, 18(2), pp. 217–228. https://doi.org/10.1016/j.ribaf.2004.04.002
    70. Shih, M.S.H. (2003) “An investigation into the use of mergers as a solution for the Asian banking sector crisis,” The Quarterly Review of Economics and Finance [Preprint]. https://doi.org/10.1016/S1062-9769(01)00135-1.
    71. Shin, D.M. and Kim, B.S. (2013) “Bank consolidation and competitiveness: Empirical evidence from the Korean banking industry,” Journal of Asian Economics, 24, pp. 41–50. https://doi.org/10.1016/j.asieco.2012.07.004
    72. Shin, G.H. et al. (2003) “How does banking industry consolidation affect bank–firm relationships? Evidence from a large Japanese bank merger,” Pacific-basin Finance Journal, 11(3), pp. 285–304. https://doi.org/10.1016/S0927-538X(03)00025-8.
    73. Singh, P. (2009). Mergers in Indian Banking: Impact Study Using DEA Analysis. South Asian journal of management, 16(2).
    74. Siriopoulos, C. and Tziogkidis, P. (2010) “How do Greek banking institutions react after significant events? —A DEA approach,” Omega, 38(5), pp. 294–308. https://doi.org/10.1016/j.omega.2009.06.001
    75. Sufian, F., & Majid, M. A. (2007). The Performance of Mergers and Acquisitions in The Singapore Banking Sector: An Application of Two-Stage Banking Models. Labuan Bulletin of International Business and Finance (LBIBF), 5, 67–96. https://doi.org/10.51200/lbibf.v5i.1440.
    76. Vallascas, F. and Hagendorff, J. (2011) “The impact of European bank mergers on bidder default risk,” Journal of Banking and Finance, 35(4), pp. 902–915. https://doi.org/10.1016/j.jbankfin.2010.09.001
    77. Valverde, S.C. et al. (2003) “Bank deregulation is better than mergers,” Journal of International Financial Markets, Institutions and Money, 13(5), pp. 429–449. https://doi.org/10.1016/S1042-4431(03)00017-9
    78. Wanke, P. et al. (2017) “Merger and acquisitions in South African banking: A network DEA model,” Research in International Business and Fi-nance, 41, pp. 362–376. https://doi.org/10.1016/j.ribaf.2017.04.055.
    79. Weiß, G.N.F. et al. (2014) “Systemic risk and bank consolidation: International evidence,” Journal of Banking and Finance, 40, pp. 165–181. https://doi.org/10.1016/j.jbankfin.2013.11.032
    80. Zhu, W. and Yang, J. (2016) “State ownership, cross-border acquisition, and risk-taking: Evidence from China’s banking industry,” Journal of Banking and Finance, 71, pp. 133–153. https://doi.org/10.1016/j.jbankfin.2016.05.004.

  • Downloads

  • How to Cite

    Chaturvedi, D. ., Bhatnagar , D. A. ., & Yadav, D. N. . (2026). Relevance of Bank Merger and Acquisition Activities on Bank‎Performance and Shareholders Wealth: A SystematicLiterature ‎Review and Future Research Scope. International Journal of Accounting and Economics Studies, 13(2), 573-586. https://doi.org/10.14419/xrbr1815