FINANCIAL PERFORMANCE AND ABNORMAL RETURN OF BANKING STOCK BEFORE AND AFTER ACQUISITION (Acquirer Banking Studies at IDX)

ABSTRACT : This study aims to analyze financial performance post-acquisition than pre-acquisition and toanalyze differences in abnormal returns of banking stocks between before and after the acquisition. Thisresearch was conducted on acquirer banking on the IDX which made acquisitions in the period 2008-2011. Thevariables of this research are financial performance and abnormal stock returns. Financial performance variablesare measured by the ratio of ROA, NIM, LDR, CAR, and NPL. Abnormal Return is calculated using the MarketAdjusted Model. The research sample was drawn by nonprobability sampling, namely the approach purposivesampling. The sample in this study amounted to three companies. The inferential analysis tool used in this studywas Pair-Sample T-Test. The results showed that the banking financial performance was not better after theacquisition than before the acquisition. Abnormal returns on banking stocks did not differ significantly betweenbefore and after the acquisition. These results indicate that the acquisition does not always have a good impacton the company’s financial performance and shareholder satisfaction.

Keywords: Acquisitions, Financial Performance, ROA, NIM, LDR, CAR, NPL, Abnormal Return.