Managing Bank Productivity Using Data Envelopment Analysis (DEA)

H. David Sherman and George Ladino
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H. David Sherman: Northeastern University, 404 Hayden Hall, Boston, Massachusetts 02115
George Ladino: Citibank N.A., 153 East 53rd Street, New York, New York 10043

Interfaces, 1995, vol. 25, issue 2, 60-73

Abstract: One bank used data envelopment analysis (DEA) to substantially improve its branch productivity and profits while maintaining service quality. It identified over $6 million of annual expense savings not identifiable with traditional financial and operating ratio analysis in its 33-branch system. A fairly new linear-programming-based benchmarking technique, DEA explicitly considers all the resources each branch uses and the services it provides. It compares branches objectively to identify the best-practice branches, the less productive branches, and the changes the less productive branches need to make to reach the best-practice level and to improve their profitability.

Keywords: programming: linear applications; financial institutions: banks (search for similar items in EconPapers)
Date: 1995
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