Annals of the University of Oradea: Economic Science (Jul 2014)
BANK MERGERS AND ACQUISITIONS IN ROMANIA AFTER 1989
Abstract
In this paper I proposed to myself to analyse the main bank acquisitions and mergers from Romania after 1989, causes that led to their appearance, their effects on the bank system and their future perspectives on the Romanian bank market. In the context of adherence to the European bank system a solution for the Romanian banks is the concentration of the bank system by mergers and acquisitions or the increase of the bank capitals because in the period of transition the smaller banks are vulnerable, don’t dispose of an infrastructure that would alow them to offer financial services comparable to those offered by the great bank groups, can’t offer large credits and is addressing to the smaller and average enterprise, which in their turn are exposed to all the shocks that are felt in the economy. The strategies of concentration and consolidation applied by the banks in this period implemented by the transactions with mergers and acquisitions are essential because of their success depends the existence of the bank, the rank it will have on the market, the profit of the bank, the efficiency, the increase of the satisfaction degree of the clients and the increase of the shares’ value. The increase of the interest of the investor in mergers and acquisitions determined the creating of the great financial conglomerates that offer a large range of services, operates simultaneously on many markets and include beside the bank activity insurance, leasing subsidiaries, investment funds, pension funds, subsidiaries specialized in credit saving. In the last decades the Romanian bank financial system suffered significant changes, registering an ample consolidation process, the number of bank institutions decreased and in the context of the present financial crisis, the continuing of the process of restructuring is anticipated.The main reason for choosing this subject if the fact that in the evolution of the concentration the bank mergers and acquisitions have a special purpose, they are necessary operations of draining the bank life by the absorption of the banks without stability by those with potential of economical and managerial stable capital. It is well known that the great banks, very strong and well consolidated created in the process of mergers and acquisitions have another potential in maintenance of the flux of profit and the balanced increase of the profitableness, having a great impact on the economy. The contribution consists in combining some conceptual elements with some empirical aspects, with the process of bank concentration created by acquisitions and fusions that leads to the elimination of some bank entitites that are not credible and stable and maintenance of those that are efficient, useful and credible for the client and for the Romanian society. The subject is a present one in the entire world, in a continuous change and adapting to the existent tendencies in the entire world, having a major impact also on the Romanian bank market, on the bank financial institutions that in order to face the competition have directed their strategies for the diversification of the risks.
