Effects of the mergers in the banking concentration and efficiency. The case of the cooperatives banks and the challenges of the financial crisis

The economic crises act as catalytic of processes of enterprise reconstruction and the mergers are often essential to avoid bankruptcies. During the last decade episodes of concentration between the Spanish small farm loan banks have taken place. The objective of the work is to analyze the effect of the mergers between small farm loan banks during decade 1998-2007 and before the present financial crisis, by means of a consisting of empirical study analyzing the Herfindhal Index and the ratio of discreet concentration to measure the concentration and to relate it to the ratios of yield and operative efficiency. The study demonstrates that the mergers in the Spanish small farm loan banks have not improved their levels of yield and efficiency although yes has increased the concentration, and that the volume of credits on deposits is not correlated with the dimension nor with its ratios of yield and efficiency.