Restructuring the branch network of a bank: the dynamic perspective

Abstract

This study reports on results of a dynamic Data Envelopment Analysis of a bank's branch network. The bank had merged with a local competitor and the resulting branch network was restructured. An initial analysis had led the management to implement a strategic network concept. To closely monitor the development of the branch system, a series of indicators for productivity and productivity change were calculated. Substantial shifts on the input-side due to restructuring bring about an initial decay of efficiency as well as productivity. The results show that the decay of network productivity slowed down during the final observation period.