Financial Performance Analysis of Indonesian Domestic Banks Before and After Acquisition By Foreign Banks
ARTATIA, GIESTA (Adv.: Singgih Wijayana, S.E., M.Si., Ph.D.), Singgih Wijayana, S.E., M.Si., Ph.D.
The purpose of this study is to empirically examine the change in the financial performance of a banking company before and after its acquisition by a foreign bank. This study uses six banks that have more than fifty percent of their controlling shares acquired by a foreign bank. The financial performance variables used in this study are quick ratio, current ratio, profit margin, return on equity (ROE), primary ratio, capital adequacy ratio, credit risk ratio and deposit risk ratio. The statistical method used to test the hypotheses is the paired sample t-test. The result of this study shows that five of eight variables change significantly. Those variables are quick ratio, current ratio, primary ratio, credit risk ratio and deposit risk ratio. No evidence of significance change occurs in the other three variables; profit margin, ROE, and capital adequacy ratio. This study provides some evidences that the financial performance of domestic banks is improved after their acquisition by foreign banks.
Kata Kunci : acquisition, domestic bank, foreign bank, financial performance, paired t-test
