The poor performance of foreign bank subsidiaries: Were the problems acquired or created?

We examine foreign acquisitions of United States banks around the time of t he ownership change to determine whether the observed poor performance of f oreign subsidiaries is the result of changes in business strategy or the pr eexisting characteristics of the target bank. We find that many of the prob lems were already present at the time of acquisition. However, changes in b usiness strategy by the foreign owners were generally not successful in rai sing the bank's performance level to that of its domestic peers. (C) 1999 E lsevier Science B.V. All rights reserved.