Abstract:
This paper analyses the characteristics that influence the likelihood of a bank being acquired in the Croatian banking market in the 2002-2014 period. Using logistic regression analysis the authors tried to explore the characteristics of target banks that also disclose the motives for acquiring a particular bank. We introduced various variables typically found to be the most likely factors influencing bank takeovers. The findings show that out of ten independent variables included in the model, one of them was statistically significant and positive (net interest margin) in predicting whether a certain bank is about to become a target company suggesting that higher values of net interest margin increase a bank's attractiveness as an acquisition target. The analysis was performed on both ranked and unranked data set but we did not find evidence that rank transformation increases predictive power.
