The Measurement of Efficiency Performance in Banking Sector A Case Study of 64 Branches of Bank Tejarat

Subject Areas : Financial Economics

Ghodratollah  Emam Verdi ¹ (Assistant Professors in Economics, Islamic Azad University, Central Tehran Branch)
Barzan  Ahmadi ² (MA on Planning of Economics Systems, Islamic Azad University Central Tehran Branch.)

Received: 2015-06-13 Accepted : 2015-06-13 Published : 2008-09-22

Keywords: Bank, Efficiency, Variable Return to Scale, Dea model,

Abstract :

In this paper attempts are made to evaluate the technical efficiency of selected 46 branches of bank Tejarat, in a specific bank operating region called region four. Toward this ends, a nonparametric technique known as Data Envelopment Analysis (DEA) has been use with a view to providing practical guidelines for efficiency improvement in the banking operation. Based on task assigned to bank managers, the assumption of output oriented Variable Return to Scale (VRS) has been utilized in this study to measure the technical efficiency achieved at. To do so, the month of May in 2225, 2228, and 2221 was selected as check points for efficiency measurement. The findings of this study indicate that average efficiency attributed to regional bank operation has declined in 2225 and this trend has lasted until 2221. The banks that have contributed to decline in lower efficiency record of region four, has been identified. The bank with more sub branches has been contributing to efficiency gain but those banks maintaining low current deposit while keeping its claims at higher level have suffered efficiency loss