Evaluating the Performance of Financial Institutions using a Data Envelopment Analysis model in a FDH networks (Case Study: Saman Bank)

Subject Areas : Financial engineering

Hadise Vahedi-Anvar ¹ , Narges Norouzi ²

1 - Department of Industrial engineering, Tehran North branch,, Islamic Azad University, Tehran, Iran.
2 - Department of Industrial engineering, Tehran North branch,, Islamic Azad University, Tehran,, Iran.

Received: 2021-11-10 Accepted : 2022-02-06 Published : 2022-12-22

Keywords: FDH, Data Envelopment Analysis (DEA), Financial Institutions, Evaluating the Performance,

Abstract :

Today, measuring efficiency is one of the most important methods of performance evaluation in any organization. The outputs obtained in all inputs represent the efficiency. Due to the comprehensiveness of the banking sector, it can be introduced as one of the main areas of economic development. In this paper, a data envelopment analysis (DEA) model in a Free Disposal Hull (FDH) network is presented considering the undesirable output for handling the status of the financial deposits in Saman Bank branches. Since the basic models calculate efficiency by considering the overall output and input and ignoring the internal relationships in the banking process flow system; therefore, by considering this issue, in this paper, we present a DEA model that calculates the efficiency score of the branches with the high accuracy. Then the proposed model is compared to the basic CCR model. Finally, the cross-performance method is used to rank the units of the branches.