Journal of the Operational Research Society

, Volume 50, Issue 9, pp 903–915

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

  • A S Camanho
  • R G Dyson
Case-oriented Paper

DOI: 10.1057/palgrave.jors.2600792

Cite this article as:
Camanho, A. & Dyson, R. J Oper Res Soc (1999) 50: 903. doi:10.1057/palgrave.jors.2600792

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 analysisbankingefficiencybenchmarkssizetarget setting

Copyright information

© Operational Research Society 1999

Authors and Affiliations

  • A S Camanho
    • 1
  • R G Dyson
    • 1
  1. 1.University of WarwickUK