Banking Performance Evaluation in China Based on Non-radial Super-efficiency Data Envelopment Analysis

Abstract

This paper employs non-radial super-efficiency model using the slacks-based measure to analyze performance of eighteen main Chinese commercial banks, including five state-owned banks and thirteen joint-stock banks. This measure will rank those banks on their performance between 2006 and 2012. Results show that among state-owned banks, the efficiency of the Agricultural Bank of China (ABC) is relatively best and that of the Bank of China (BOC) is relatively worst. Among joint-stock banks, the Bank of Beijing (BOB) is most efficient relative to the other joint-stock banks and the efficiencies of the Bank of Nanjing (BON) and Ningbo Commercial Bank (NCB) are least efficient relative to the other joint-stock banks. Moreover, the overall efficiency mean of the state-owned banks exceeds that of the joint-stock banks in 2008, 2010, 2011 and 2012. When viewing the overall ranking, except for ABC, the other four state-owned banks scored lower relative to the other commercial banks in 2006, 2007 and 2009. Since 2009, the ranking of each bank fluctuates with the exception that BOB remains ranked at number one.