Filene: Bigger Thru Merger Not Always Better Posted by AVCU on 9:44 AM

Bigger is better, or at least marginally less expensive, right? Conventional wisdom about mergers is that they reduce operational expenses. They are supposed to lead to reductions in staff, consolidation of systems and vendors, more talented overall leadership, streamlined product structures, improved supplier pricing, and so on.  But in Impact of Mergers on Credit Union Costs: 1984 to 2009 Luis Dopico, PhD, and Jim Wilcox, PhD, show that mergers don't always reduce operational costs. In fact, among mergers of equals, fully 20% actually showed increased costs after five years. The white paper study is a product of the Filene Research Institute. Download the report here for more merger analysis.