Estimating the Efficiency of Banks by DEA Approach and Investigating its Relationship with Financial Ratios
Subject Areas :Fatemeh Mesgarpour Amiri 1 , Naser Yadollah zadeh Tabari 2
1 - MA Student Islamic Azad University Babol Branch
2 - Assistant Professor Islamic Azad University Babol Branch
Keywords: Efficiency, Data envelopment analysis, financial ratio,
Abstract :
The evaluation of performance of banks due to its crucial role in most economic activitiesand health maintenance of financial markets and economic conditions has always been considered On the other hand, because of the responsibility of DEA models - especially in detecting and determining the efficiency of banks has led to the use of the above-mentioned models is extensive. The goal of this article is to offer DEA for evaluating the performance of banks. Efficient and inefficient banks have been identified and finally, for the inefficient banking units the reference model has been introduced. In addition, the relationship between financial ratios and efficiency has been studied. The results show that 9 of the 20 units were efficient and the rest were inefficient. 8 financial ratios are presented: capital adequacy ratio, profitability ratios, management ratio and the asset quality ratio had the most direct relationship with performance.
