Intermediation Efficiency of Banks in South-East Europe: An Empirical Assessment Using Dea and Malmquist Index (original) (raw)
Related papers
Efficiency of Macedonian Banks: A DEA Approach
The purpose of this paper is to estimate the efficiency of the banking sector of Republic of Macedonia for the period 2008-2011. Technical, pure technical and scale efficiency of 15 Macedonian banks have been measured using Data Envelopment Analysis (DEA), both CCR and BCC model. Intermediation approach has been applied in order of measuring banks efficiency in transforming the deposits into investments and credits with intermediation of labor. The results from the analysis indicate an increase of the average efficiency from 2008 to 2010 and an efficiency decrease in 2011. The scale efficiency follows the same trend. The study implies that the main source of inefficiency is due to scale inefficiencies. Regarding group of banks, the group of large banks have a highest pure efficiency scores but the greatest scale inefficiency. The group of small banks is technically the least efficient.
Academic Journal of Interdisciplinary Studies, 2015
The recent years' crisis has affected the Western Balkan economies. The deterioration of macroeconomic indicators was reflected particularly in the banking sector developments as main segment of their financial systems. Referring to the results of previous personal study (Varesi, L., 2014), the banking efficiency, profitability, liquidity, capital adequacy ratios fell during the crisis period compared with that before. The lending remained low despite the continuous reduction of interest rates due to the contraction of these economies. Fluctuations, instability and uncertainties increase the vulnerabilities of financial systems and complicates the banking sector supervision and enforcement of banking regulations. This paper aims to examine the technical efficiency of the banking sector of six Western Balkan countries considered each as a Decision Making Unit, using Data Envelopment Analysis and the intermediation approach according to Avkiran, N.K.,(2006). The paper intends to present differences in the estimated efficiencies to the variables used in representing the size of the banking sector by number of branches, total assets and total loans. The evaluation of efficiencies refers to the year 2007 to 2012. The effects of 2008 crises in the efficiency of banking sector of WB countries are also examined in this comparative study.
The recent years' crisis has affected the Western Balkan economies. The deterioration of macroeconomic indicators was reflected particularly in the banking sector developments as main segment of their financial systems. Referring to the results of previous personal study (Varesi, L., 2014), the banking efficiency, profitability, liquidity, capital adequacy ratios fell during the crisis period compared with that before. The lending remained low despite the continuous reduction of interest rates due to the contraction of these economies. Fluctuations, instability and uncertainties increase the vulnerabilities of financial systems and complicates the banking sector supervision and enforcement of banking regulations. This paper aims to examine the technical efficiency of the banking sector of six Western Balkan countries considered each as a Decision Making Unit, using Data Envelopment Analysis and the intermediation approach according to Avkiran, N.K.,(2006). The paper intends to present differences in the estimated efficiencies to the variables used in representing the size of the banking sector by number of branches, total assets and total loans. The evaluation of efficiencies refers to the year 2007 to 2012. The effects of 2008 crises in the efficiency of banking sector of WB countries are also examined in this comparative study.
EFFICENCY OF THE MACEDONIAN BANKING SECTOR: A NON-PARAMETRIC APPROACH
The aim of this paper is to measure the relative efficiency of the commercial banks in Macedonia by using the non-parametric methodology Data Envelopment Analysis (DEA). The key role when applying DEA for measuring the efficiency of entities is given to the selection of inputs and outputs. In our study 3 inputs and 3 outputs are selected according to the intermediation approach. The sample consists of 14 banks and the observed period is eight years (2008-2015). According to the obtained results, the average efficiency of the Macedonian banking sector in the observed period is 88.77%. There is no bank that is relatively efficient in every year in every window. The results indicate that 28.57% of the banks have an overall efficiency by years that is higher than 95%. The group of large banks has the highest efficiency in the Macedonian banking sector. Furthermore, Macedonian banks have noted lower efficiency in the post-crisis period. Findings from our paper are valuable for further use by regulators, policy makers and bank management in order for the efficiency of the relatively inefficient Macedonian banks and the banking sector as a whole to improve.
Efficiency of the Bulgarian Banking System: Traditional Approach and Data Envelopment Analysis
2008
The present paper traces the trends in the development of the Bulgarian banking system focusing on the dynamics of bank efficiency. Although the financial crisis in 1996-1997 and the following shift in monetary regime (introduction of Currency Board Arrangement) exerted significant influence on the development of the banking sector characteristics, the study covers only the period of 1999-2006 because of the lack of consistent available data prior to 1999.
External Two Stage DEA Analysis of Bank Efficiency in West Balkan Countries
Sustainability, 2022
Since the beginning of the application of the Data Envelopment Analysis (DEA) model in various areas of the economy, it has found its wide application in the field of finance, more specifically banks, in the last few years. The focus of this research was to determine the sustainability of the intermediate function of banks, especially in recent years when interest rates on deposits have been at a minimum level. The research was divided into two parts, wherein the first part determined the efficiency of the intermediate function of banks in the countries of the Western Balkans in the period from 2015 to 2019. The second part approached the regression analysis in which we determined the influence of the bank size, type of bank, and mergers and acquisitions (M&A) activity on the defined efficiency. In the first stage we applied the output-oriented DEA model using deposits, labor costs, and capital as input variables; on the other side, we used loans and investments as output variables....
Analysis of Bank Efficiency in the Republic of Serbia: Dea Approach
2017
The structure of Serbian banking system has substantially changed over the past decade as a result of a comprehensive reform which has regulated the banking system and reduced the number of banks. With the arrival of foreign banks banking environment has become more competitive. Therefore, bank management should focus on improving efficiency which will consequently lead to the improvement of the competitive position. This paper uses Data Envelopment Analysis (DEA) to examine and evaluate the efficiency of Serbian banks during the period 2014–2016. The analysis will show which of the banks operate efficiently and which of the banks have efficiency that is not at a satisfactory level, as well as the potential reasons of inefficiency.
A Comparative Study of Efficiency in Central and Eastern European Banking Systems
International journal of economics and finance, 2012
The European integration process has had a great impact on the macroeconomic environment of the new member states, some effects being more visible than other. In this context it becomes interesting to analyse if the EU ascension has triggered an increase of the banks efficiency from a series of CEE countries (two from the first wave and one from the second wave of EU expansion). The analysed period is between 2003 and 2010, covering the first years after the EU ascension of these countries. In order to estimate the efficiency of the banks from our sample we have used a non-parametric technique, namely the Data Envelopment Analysis. The overall results are suggesting that there is a slight increase of the banks operating in these countries estimated efficiency between 2007 and 2010.
Determinants of bank efficiency in Turkey-a two stage data envelopment analysis.pdf
Financial industry plays an important role in the economy and banks are indispensable players in the financial industry. Therefore, the evaluation of banks' performance became a popular research topic in all over the world, and also in Turkey. There are different techniques to determine the banks' performance. Among those techniques, Data Envelopment Analysis (DEA), which is a non-parametric technique, has been widely used in the banking sector. In this research, we analyzed the efficiency of Turkish Banking Industry with Data Envelopment Analysis (DEA) methodology between 2002 and 2007. All the banks that constantly operated in the years between 2002 and 2007, excluding investment and development, participation banks, get into the analysis. So there are four groups of banks in the research, those are state-owned deposit banks, privately-owned deposit banks, foreign banks founded in Turkey, and foreign banks having branches in Turkey. In the research model, number of employees, interest expenses, non-interest expenses and total deposit are determined as input, total credits, interest revenue and non-interest revenue are determined as output. This analysis aims to explain the variation in efficiency scores with a set of explanatory variables, such as size, ownership type, nationality, being publicly held. According to results, the efficiency levels do not change very much between 2002 and 2007. The efficiency scores reached top level in 2005 and 2006. The results of regression application denote that all of the explanatory variables have a significant effect on banks' efficiency levels. According to regression analysis results, size negatively affects the efficiency levels of banks. Publicly listed banks operate more efficient than not publicly listed banks. Foreign owned banks operate more efficient than their domestic peers. Furthermore, state owned banks are less efficient than non-state banks.
Bank Efficiency in Indonesia in the Perspective of an Intermediation Approach
Zenodo (CERN European Organization for Nuclear Research), 2023
To be able to achieve the best level of efficiency, the bank must be able to manage the inputs owned and the outputs produced in between. In addition, banks must also be able to manage operational costs and operating income. In this analysis of efficiency is calculation of the ratio between input and output variables. This research is using nonparametric Data Envelopment Analysis (DEA) for bank in Indonesia in group level two (BUKU II) banks which registered at IDX with period of analysis in 2014-2018. To analyze its efficiency by using intermediary approach. The sample analysis are taken from all population banks in BUKU II that already go public, which consist of two sharia banks, and sixteen conventional banks (four foreign banks, one state-owned bank and eleven national private banks). The results of the study indicate that there are several banks that are able to achieve a level of efficiency both using the intermediation approach. In 2014, there were four banks that were able to achieve efficiency levels. In 2015 and 2016, only three banks was able to achieve efficiency levels. However, in 2017 only two banks was able to reach the level of efficiency. In 2018 there were four banks that were able to achieve a level of efficiency using the intemediation. The results of this study are expected to be useful for evaluating the level of efficiency that occurs in banks in Indonesia