Efficiency, size, benchmarks and targets for bank branches: an application of data envelopment analysis

A S Camanho () and R G Dyson
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A S Camanho: University of Warwick
R G Dyson: University of Warwick

Journal of the Operational Research Society, 1999, vol. 50, issue 9, 903-915

Abstract: Abstract This paper describes an application of data envelopment analysis (DEA) to the performance assessment of Portuguese bank branches. The analysis shows how DEA can complement the profitability measure currently used at the bank. The use of an efficiency-profitability matrix enabled the characterisation of the branches' performance profile. Consistent with the bank's development objectives, the analysis focused on the relation between branch size and performance. Two alternative target setting strategies were explored. One eliminates pure technical inefficiencies by focusing on the selection of appropriate benchmarks. The other attains the branches' most productive scale size through the elimination of scale inefficiencies, with minimal changes to branches' scale size.

Keywords: data envelopment analysis; banking; efficiency; benchmarks; size; target setting (search for similar items in EconPapers)
Date: 1999
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Citations: View citations in EconPapers (46)

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DOI: 10.1057/palgrave.jors.2600792

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