Abstract:
Given the rapid development of the banking sector, it is reasonable to expect that
the performance of banks has become the centre of attention among bank managers,
stakeholders, policy makers, and regulators. In order to maximizing the shareholders’
satisfactory level, two bank efficiency measurement approaches, i.e. the
production approach and the user cost approach, which are financial evaluations,
are employed. The evaluations are done by means of data envelopment analysis
method. The proposed methodology is run on the 15 privet bank branches in
Markazi province. By using this approach, four regions that show the various
performances are obtained. In addition the status of returns to scale for each bank
branch is calculated.
Machine summary:
Improving the Banks Shareholder Long Term Values by Using Data Envelopment Analysis Model Mohammad Izadikhah Department of Mathematics, College of Science, Arak Branch, Islamic Azad University, Arak, Iran, P.
O. Box: 38135/567 ARTICLE INFO Article history: Received 13 July 2017 Accepted 2 September 2017 Keywords: Banking,Financial Assessment, Efficiency,Data Envelopment Analysis,Returns to Scale ABSTRACT Given the rapid development of the banking sector, it is reasonable to expect that the performance of banks has become the centre of attention among bank manag- ers, stakeholders, policy makers, and regulators.
With the modern frontier effi- ciency methodologies, including parametric and non-parametric approaches, typically regarded as good instruments for analysing the performance of financial institutions, the growth in bank efficiency research has been explosive.
2. 2 Main bank behaviour models This section aims to provide an insight into two of four main approaches which are most popularly employed in DEA efficiency studies to specify banks’ input factors and output factors.
3. 1 Inputs and outputs The main focus of evaluating the privet bank’s performances is to maximizing shareholder values in the long term and in order to achieve this goal the bank branches are supposed to minimizing operat- ing costs and user costs of holding such liabilities and assets.
The more bank branches in higher efficiency ranges in user cost approach shows that the banks are more successful in this viewpoint and they should try more to improve their performance in the production approach.
, Measuring the efficiency of service operations: an application to bank branches.