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Journal of Financial Services Marketing

, Volume 11, Issue 4, pp 333–348 | Cite as

Evaluating the operational and profitability efficiency of a UAE-based commercial bank

  • Hussein A Hassan Al-Tamimi
  • Ahmad M Lootah
Analysis Paper

Abstract

This study investigates the operating and profitability efficiency of 15 branches of UAE-based commercial bank utilising the data envelopment analysis method. The results indicate that efficiency levels among the various branches vary and that there is room for improvement. Profitability efficiency appears to be higher than operational efficiency. Regarding the financial ratios analysis, a consistent effect cannot be obtained and it cannot be determined which branch has an overall position in terms of higher performance. The historical analysis of the branch network performance indicates that management should consider major operational improvement efforts to reduce employees' expenses and other operating expenses combined with an increase in the total loans portfolio. Improvement in both interest and non-interest revenues is required to increase profitability efficiency of the whole branch network.

Keywords

bank performance DEA operating efficiency profitability efficiency financial ratios 

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Copyright information

© Palgrave Macmillan Ltd 2007

Authors and Affiliations

  1. 1.Department of Business AdministrationCollege of Business and Management, University of SharjahSharjahUnited Arab Emirates

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