Estimating Optimum Location & Performance of a Branch Network After Mergers & Acquisitions of Financial Institutions

Maria Mavri

Abstract: During financial crisis, many banks are reformed in order to become more efficient in the new economic environment. Mergers and acquisitions commonly take place in all financial markets. In this study based on a previous work, in which we proposed the PERFORMANCE algorithm for reconfiguring bank branch network according to the dictates of the market (the optimum number of branches for bank networks, the optimum performance), we add a LOCATION procedure to the algorithm to define, branches’ optimum locations. The algorithm reveals a solution by taking into account both operational and relocation costs of branches. The goal of the study is to propose a “decision” tool to policy makers, provide them with a pre- and post- evaluation report of the potential upcoming consolidation of institutions, and aid policy makers in making difficult financial decisions.

Keywords: banks; mergers/acquisitions; branch Location; performance measures.

Pages: 122 – 140 | Full PDF Paper