Does Acquisition Improve Indonesian Bank Financial Performance?

Yutrizal Jacoub, Dedi Budiman Hakim, Sri Hartoyo, Perdana Wahyu Santosa
2020 International Journal of Business and Applied Social Science  
The purpose of this study was to examine the differences in the financial performance of Indonesian banks before and after the acquisition during the period 2002-2017. There were 41 merger and acquisition transactions during this period conducted by foreign and domestic investors/banks. The analysis of this study was conducted on two groups, the first group is a sample of bank acquisitions conducted by foreign investors/banks, and the second group is a sample of bank acquisitions conducted by
more » ... mestic investors/banks. Samples collected from 24 local private banks, which were acquisitions in the period 2002-2017. Data from annual reports and bank publications derived from the Financial Services Authority (OJK). Statistical Methods used in this study were descriptive statistics, t-test, and Wilcoxon Test. Empirical evidence has shown that in both sample groups, credit quality improved. However, in the sample group of cross-border acquisitions, there was also an improvement in management compliance with regulatory regulations where the minimum reserve requirement increased, while the capital adequacy ratio increased only for banks that were acquired by domestic investors/banks.
doi:10.33642/ijbass.v6n3p5 fatcat:swz57qrtxjdmnn7sbuvmu4cwp4