The Impact of Mergers and Acquisitions on Profitability of Commercial Banks - Case of Bank For Investment and Development of Vietnam

Abstract

This article examines the impact of mergers and acquisitions (M&A) on the profitability of commercial banks after M&A - a case study of a merger between the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) and the Mekong Delta Housing Development Joint Stock Commercial Bank (MHB). The authors use research methods such as graphs, comparison and analysis of profitability indicators of commercial banks such as ROE, ROA, NIM, NNM before and after the merger; Use the t test in Stata 14 to compare the difference in pre- and post-merger profitability of BIDV. The data source used in the study is secondary from Vietstock and Stockbiz in the period from 2011 to 2019. The research results show that the profitability of BIDV after the merger tends to decrease compared to before the merger. On the basis of the research results, the authors gave some governance implications for BIDV in particular and Vietnamese commercial banks in general; At the same time, it also gives some policy implications for the State Bank of Vietnam (SBV)