Abstract
Article history: Received March 5, 2015 Received in revised format August 16 2015 Accepted September 31 2015 Available online October 9 2015 Banking industry has significant contribution in development of economies of developing countries. Most banks execute their operations through different branches. Therefore it is important to measure the relative efficiencies of these branches. Data envelopment analysis (DEA) is one of the most useful tools in measuring banks’ performance. The present paper aims to extract ranking pattern of banks based on performance evaluation using DEA analysis. In the present research, 120 bank branches of Bank Shahr in city of Tehran were selected and their efficiencies were evaluated using DEA technique. The results are discussed and compared with similar studies. Growing Science Ltd. All rights reserved. 5 © 201
Highlights
An understanding of bank branch efficiency may help resolve different conceptual, measurement, and policy concerns about efficiency at the bank level (Yildirim, 2002; Berger et al, 2003)
The study used Data Envelopment Analysis (DEA) to selected fundamental financial ratios based on the data over the period 1989–99 data from commercial banks in Turkey
Stoica et al (2015) implemented DEA to measure the aggregate efficiency score for each of the 24 banks and utilized PCA to classify the banks into various operational strategies groups based on their relative efficiency scores
Summary
An understanding of bank branch efficiency may help resolve different conceptual, measurement, and policy concerns about efficiency at the bank level (Yildirim, 2002; Berger et al, 2003). Measuring and assessment the operating efficiency of bank branches needs analytic techniques, which give insights beyond those available from accounting figures. Data Envelopment Analysis (DEA) (Charnes et al, 1978, 1985, 2013), a mathematical programming technique, gives insights in determining inefficient branches by explicitly investigating the mix of services provided and the resources implemented to have these bank services (Wang et al, 2014; Wanke & Barros, 2014).
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