Bank resolutions through M&As: The case of Ghana’s purchase and assumption agreement
In this article, we examine the possible effects of acquisition through a Purchase and assumption agreement (P&A) as a resolution approach by the central bank of Ghana on the performance of the acquiring bank post-acquisition. By assessing the execution of the first P&A agreement, we contrib...
Saved in:
| Main Authors: | , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Taylor & Francis Group
2023-12-01
|
| Series: | Cogent Business & Management |
| Subjects: | |
| Online Access: | https://www.tandfonline.com/doi/10.1080/23311975.2023.2176409 |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| _version_ | 1850188610417983488 |
|---|---|
| author | Fan Yang Nana Adwoa Anokye Effah |
| author_facet | Fan Yang Nana Adwoa Anokye Effah |
| author_sort | Fan Yang |
| collection | DOAJ |
| description | In this article, we examine the possible effects of acquisition through a Purchase and assumption agreement (P&A) as a resolution approach by the central bank of Ghana on the performance of the acquiring bank post-acquisition. By assessing the execution of the first P&A agreement, we contribute to the dearth of literature on the impact of M&As on bank performance in a developing context. We use secondary data from the Ghana Stock Exchange and the acquirer’s financial reports from 2015 to 2019 to assess the likely performance changes. We employ event study methodology and ratio analysis to determine the impact. We observe that while depositor funds were saved and the acquirer succeeded in widening their asset base through the acquisition, their efficiency levels during the assessed period did not improve. Our findings help explain the effects of such M&As through P&As on bank performance to assist investors and management in decision-making. It further accentuates the importance of adequate preparations before embarking on any sort of P&A agreement. |
| format | Article |
| id | doaj-art-76dac968937643e6ad52f021501dc278 |
| institution | OA Journals |
| issn | 2331-1975 |
| language | English |
| publishDate | 2023-12-01 |
| publisher | Taylor & Francis Group |
| record_format | Article |
| series | Cogent Business & Management |
| spelling | doaj-art-76dac968937643e6ad52f021501dc2782025-08-20T02:15:51ZengTaylor & Francis GroupCogent Business & Management2331-19752023-12-0110110.1080/23311975.2023.2176409Bank resolutions through M&As: The case of Ghana’s purchase and assumption agreementFan Yang0Nana Adwoa Anokye Effah1School of Accounting, Zhongnan University of Economics and Law, Wuhan, Hubei, ChinaSchool of Accounting, Zhongnan University of Economics and Law, Wuhan, Hubei, ChinaIn this article, we examine the possible effects of acquisition through a Purchase and assumption agreement (P&A) as a resolution approach by the central bank of Ghana on the performance of the acquiring bank post-acquisition. By assessing the execution of the first P&A agreement, we contribute to the dearth of literature on the impact of M&As on bank performance in a developing context. We use secondary data from the Ghana Stock Exchange and the acquirer’s financial reports from 2015 to 2019 to assess the likely performance changes. We employ event study methodology and ratio analysis to determine the impact. We observe that while depositor funds were saved and the acquirer succeeded in widening their asset base through the acquisition, their efficiency levels during the assessed period did not improve. Our findings help explain the effects of such M&As through P&As on bank performance to assist investors and management in decision-making. It further accentuates the importance of adequate preparations before embarking on any sort of P&A agreement.https://www.tandfonline.com/doi/10.1080/23311975.2023.2176409Mergers and Acquisitions (M&As)banking industrypurchase and assumption agreementevent studyaccounting ratios |
| spellingShingle | Fan Yang Nana Adwoa Anokye Effah Bank resolutions through M&As: The case of Ghana’s purchase and assumption agreement Cogent Business & Management Mergers and Acquisitions (M&As) banking industry purchase and assumption agreement event study accounting ratios |
| title | Bank resolutions through M&As: The case of Ghana’s purchase and assumption agreement |
| title_full | Bank resolutions through M&As: The case of Ghana’s purchase and assumption agreement |
| title_fullStr | Bank resolutions through M&As: The case of Ghana’s purchase and assumption agreement |
| title_full_unstemmed | Bank resolutions through M&As: The case of Ghana’s purchase and assumption agreement |
| title_short | Bank resolutions through M&As: The case of Ghana’s purchase and assumption agreement |
| title_sort | bank resolutions through m as the case of ghana s purchase and assumption agreement |
| topic | Mergers and Acquisitions (M&As) banking industry purchase and assumption agreement event study accounting ratios |
| url | https://www.tandfonline.com/doi/10.1080/23311975.2023.2176409 |
| work_keys_str_mv | AT fanyang bankresolutionsthroughmasthecaseofghanaspurchaseandassumptionagreement AT nanaadwoaanokyeeffah bankresolutionsthroughmasthecaseofghanaspurchaseandassumptionagreement |