Assessing the efficiency in operations of a large Greek bank branch network adopting different economic behaviors

Abstract

This paper reports on an assessment of the branches of a Greek bank in terms of their performance in three different dimensions: their efficiency in managing the economic record of the branches, their efficiency in meeting the demand for transactions with customers and their efficiency in generating profits. From a methodological point of view the paper employs the non-parametric method Data Envelopment Analysis. Furthermore, branches are assessed using a loglinear deterministic frontier method, in order to examine the concordance of efficiency rating between two models. Small differences were found in the distribution of efficiency estimates. In all cases, the results indicated that there is the scope for substantial efficiency improvements. The most useful information we can provide to bank management is the similar insights of the worst performing branches, as all models identify essentially the same — low performing branches in the bank network.