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Do bank mergers within the same market work?

Most in-market deals are predicated on reducing costs, a tough task given the challenges of retaining key personnel, staff severance, systems integration and political implications.

Published Tue, Feb 24, 2015 · 09:50 PM
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BANKING mergers and acquisitions generate a lot of excitement with the usual announcements extolling the virtues of the proposed combination. The three-way merger in Malaysia between CIMB, RHB and MBSB, which collapsed recently, is no exception. Combining two banks is difficult enough. This involved three parties, one of which was a non-bank.

The stock market reaction to the collapse was quite telling. In the face of declining markets, the stock price of the banks rose, demonstrating the ma…

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