Master's Thesis from the year 2012 in the subject Business economics - Banking, Stock Exchanges, Insurance, Accounting, grade: 8, University of Twente (School of Management and Governance), language: English, abstract: In the following thesis I examine the performance effects of merger within the German cooperative banking sector on the basis of agency, synergy and market power related changes. Furthermore, from a strategic management perspective the role of strategic similarities is analyzed. Performance enhancing effects are found from a synergy and market power theory perspective in terms of a reduction in interest costs. Furthermore, problems with synergy gains in the area of personnel costs are discovered. These are so serious that they have hampered a significant change in overall bank performance. A change in market power is also measured in terms of a significant increase in other operating income. It is not possible to detect any significant change in agency related costs. Further, I describe that strategic similarities and size differences are not leading to increased profitability. Instead, differences in diversity of earnings are found to be performance enhancing. Therefore, the previously described increase in other operating income can also be facilitated by economies of scope: services that are originally only provided to the customers of one bank are in the post-merger period provided to the united institute's combined customer base.
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