Forecasting of Customers’ Retention In Terms of Merger and Acquisition Processes of Egyptian Banks Using Panel Data Techniques

This paper aims at analyzing the response of banks' customers, due to changes of banking market structure, where many of these customers may switch their banks, and this is why, determinants of these decisions should be elaborated. In this study, the sample contains 6 cases, out of 20 cases of merger and acquisition processes (M&As) between Egyptian banks, during the period from the beginning of 2005 to the end of 2010. Using Panel Data Models, we could accept hypotheses regarding the effects of “Change in Bank Equity” and “Change in Bank Assets” on “Customers' Retention”. Also, Results refer to the need to reject hypotheses regarding the effects of “Change in Bank Loans”, “Change in Bank Deposits", “Change in No. of Services” and "Change in No. of Branches”. Wu-Hausman test, Likelihood Ratio test and Breusch-Pagan test justify these results