Importance Mergers and acquisitions (M&A) have become very popular during the recent few decades as a tool to enhance growth and increase capitalization of businesses. Despite the high theoretical efficiency of M&A transactions, their practical efficiency is rather low. Objectives The study aims to disclose reasons for low practical efficiency of mergers and acquisitions of banks, and offer possible ways to improve their profitability. Methods We applied methods of business valuation, factor analysis, statistical and econometric analysis to reveal the key problems associated with bank valuation and the choice of the best time to implement an M&A deal. Results The paper discloses the contradiction between theoretical and practical efficiency of M&A transactions, presents the results of analysis of the use of traditional approaches to bank valuation, shows the limitations of their application due to objective factors. We underpin the need for developing the methodology for integrated bank mergers and acquisitions valuation and offer possible ways of its perfection. Conclusions and Relevance The main reasons for low practical efficiency of bank M&A transactions are limited methodological basis for credit institutions valuation and the lack of strategy to implement the deal that would take into account the bank M&A market conditions.
Keywords: bank, valuation method, M&A, mergers and acquisitions
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