MERGERS AND ACQUISITIONS. A CREDIT RISK EVALUATION IN THE GREEK BANKING INDUSTRY SHORT- AND LONG-TERM TIME PERIOD AFTER THE EVENT

Abstract

The Greek banking system was greatly affected by the financial crisis that began to plague Greece in 2010. Therefore, in order to have competitive Greek banks, a rally of acquisitions and mergers of Greek banks began in 2010 and ended mainly in 2015. So, in essence, the Greek economy was left with only four large Greek systemic banks, which took over the other large and small distressed Greek banks under the specter of bankruptcy. This wave of acquisitions and mergers in the Greek banking system created strength in Greek banks mainly in terms of assets and at the same time protected the interests of Greek depositors. This paper deals with the assessment and calculation of the credit risk that led to the bankruptcy of the four Greek systemically important banks with Z-Score models. These banks are Piraeus Bank, National Bank, Eurobank, and Alpha Bank. The time period for conducting our study is limited from 2015 to 2020. The year 2015 is essentially the last year in which all the important and large mergers and acquisitions of Greek systemic banks that occurred immediately after the onset of the financial crisis in Greece in the year 2010, were completed. The last year of our study is the year 2020 when the pandemic started in Greece. In our paper, extensive reference is made to the credit risk models that we apply in our study, namely the Z-Score, the Z-Score for banks, and the Zeta model. The analysis of our findings is accompanied by tables, diagrams, and comments on them. The final comparative results obtained are forecasts for imminent possible or non-bankruptcy of the Greek systemic banks we examined. At the end of our paper, we present some conclusions about the Greek banking system and its future.

JEL: G21, G33, G34

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