Seminar Series in Management Science and Quantitative Economics

Diego Ruiz-Hernández
Colegio Universitario de Estudios Financieros

Reduction and Resizing of Redundant Branches during a Restructuring Process

Jueves 13 de Octubre de 2011, de 1300 a 1430
Colegio Universitario de Estudios Financieros
Serrano Anguita 8, Madrid, 28004
Sala de Seminarios (Aula 12)

The process of merger of the Spanish saving banks (“cajas de ahorros”) has open a number of questions regarding the management and operation of the resulting larger institutions. One of the most challenging is the one related with the closing of redundant branches located in neighbouring areas. Over the last years, saving banks in Spain have open a number of branches, in many occasions larger than what would have been economically efficient, in order -mostly- to capture market share. Even though this could have appeared to be effective at some point, the merger of two or three small saving banks into one larger institution has raised an important issue regarding redundant branches. This situation rises a very interesting inverse location, opposite to the one traditionally found in location theory literature: how many branches must be kept and which ones should be closed.

An additional feature of the inverse location problem that we are introducing in this work is the fact that the branches’ relocation/closing down decisions that are been taken by the saving banks is simultaneous for many firms, which adds an element of uncertainty to the decision maker, as the location of the competitors in not known with certainty. This issue will be addressed later in our project’s evolution.

Finally, been an open issue, the current process provides a unique opportunity to test the results of the more methodological approach developed in the academic contributions of this project, to real time situations and with very good quality data.

Para confirmar asistencia y para cualquier asunto relacionado con el Seminario contactar con Prof. Dídac Ruiz-Hernández
(d.ruiz@cunef.du)