An Empirical Study of Bank Efficiency in South Africa Using the Standard and Alternative Approaches to Data Envelopment Analysis (DEA)

Erasmus, Coert Frederik; Makina, Daniel

doi:10.22610/jebs.v6i4.494

Cited by 21 publications

(19 citation statements)

References 33 publications

(48 reference statements)

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“…It is the only country in the world that has mandated the integrated reporting for the public listed companies ( Financial services sector in general and banking in particular, is an important sector because what happened in the global financial crisis in 2008-2009 emanated from this sector as a result of too much risk being taken within very little transparency and reporting climate (Cerasi & Oliviero, 2015). Although South African banking sector was largely insulated from the global financial crisis (Erasmus & Makina, 2014), the sector remains an important player in the economy.…”

Section: Studies On Integrated Reportingmentioning

confidence: 99%

Integrated reporting and financial performance of South African listed banks

Matemane

Wentzel

2019

Banks and Bank Systems

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The recent development of integrated reporting intends to address the limitations associated with corporate reporting practices. This paper aims to examine whether a statistically significant relationship exists between integrated reporting quality and financial performance. Secondary data was used, namely the integrated reports and annual financial statements of South African banks listed on the Johannesburg Stock Exchange (JSE) for 2010–2014. For the period 2005–2009, only the financial statements were used, since integrated reporting was not yet mandatory. The research design was longitudinal and it combined qualitative and quantitative methods. Descriptive statistics and Feasible Generalized Least Square (FGLS) were used to explore the relationships between financial performance and integrated reporting quality. The results indicate that there is a positive relationship between integrated reporting quality (IRQ) and earnings per share (EPS). However, there is no significant relationship between IRQ and Tobin’s q (Q-Ratio), IRQ and return on equity (ROE), IRQ and return on assets (ROA) as well as IRQ and economic value added (EVA). Moreover, there are no significant differences on the financial performance of the listed banks before and after the introduction of integrated reporting.

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Section: Studies On Integrated Reportingmentioning

confidence: 99%

Integrated reporting and financial performance of South African listed banks

Matemane

Wentzel

2019

Banks and Bank Systems

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“…Akomea-Frimpong (2017) finds that foreign banks are not necessarily more efficient than their domestic rivals. Erasmus and Makina (2014) showed that the global financial crisis did not affect the efficiency of the majority of the banks. Since the banks were efficient prior the crisis, it could be argued that their efficiency was one of the contributory factors for their resilience during the global financial crisis.…”

Section: Literature Reviewmentioning

confidence: 99%

Measuring Efficiency and Effectiveness of Indonesian Regional Development Banks

Akbar

Djazuli²,

Jariyatna³

2019

JTAKEN

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This study explores the efficiency and effectiveness of Regional Development Banks (BPD) based on the results of performance audit conducted by the Audit Board of the Republic of Indonesia (BPK RI). Performance audit produces conclusion and recommendation on economy, efficiency and effectiveness (3E). BPDs are expected to be regional champions in their respective regions. Data envelopment analysis (DEA) is used to calculate the level of production and operational efficiency of the BPDs while the level of effectiveness is assessed based on the results of performance audit conducted by BPK RI. The results show that both efficiency and effectiveness are not always achieved. This study also identifies BPD that have the highest value of production and operational efficiency and the level of effectiveness. The BPD obtained the highest efficiency and effectiveness values that could be used as a reference for other BPDs to make improvements and become a regional champion in their respective regions.

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“…However, Maimbo (2002) found that a lack of enforcement and supervisory forbearance undermine the key role played by those institutions and increase the risk of bank failure. In South Africa, the banking supervisory system protected banks against market change and negative impact of the crisis (Van der Westhuisen, 2013; Erasmus and Makina, 2014). Banks supervisory department of the South Africa Reserve Bank also defines bank legislation and international standards to be followed by all banks.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Many studies conducted around bank performances in South Africa, focused on the period around the financial crisis that occurred in 2007(Van Heerden and Heymans, 2013). However, the study conducted by Erasmus and Makina (2014) showed that the effect of financial crisis on the South African banking system was minimal because of the sound supervisory system (Van der Westhuisen, 2013) and the low exposure to foreign currency debt (Kumbirai and Webb, 2010). This implies that considering the financial crisis event on research related to South African bank performance is not significant.…”

Section: Literature Reviewmentioning

confidence: 99%

Critical Assessment of Banking Institutions in South Africa

Fotso

Edoun

2017

JEBS

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Banks play an important role in a countryâ€™s economy through investments, deposits and withdrawals. Many banking products are sold to clients to meet their financial needs and obligations. Their performances are therefore very critical in supporting socio economic development. Financial institutions still facing challenges linked to the lack of financial previsions through the use of financial tool that allows preventing financial distress. Banks are not always well-managed because managers lack capacity and the sound knowledge in dealing effectively with the analysis of risk and return and decision-making. The current study highlights and gives orientations on key performance indicators that bank can use to manage their financial conditions in advance in a sustainable manner. The major objective of this research is to critically assess the South African banks performance using Financial Ratio Analysis (FRA)and descriptive statistics through comparative financial statement analysis form 2010 to 2013 betweenâ€œ the big fourâ€ South African banks. In using correlational analysis, the study aim to establish the link between exogenous and endogenous variables of bank performance. The results showed that FirstRand bank was the best achiever with a higher level of performance following by Standard bank, then Absa and Nedbank. Furthermore, it appears that there is a strong relationship between bank performance and bank size because the volume of assets represents the bigger source of bank incomes. This study opens door to further study including both large and small banks and a comparative analysis between two research methods. The paper is divided into five major sections.

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An Empirical Study of Bank Efficiency in South Africa Using the Standard and Alternative Approaches to Data Envelopment Analysis (DEA)

Cited by 21 publications

References 33 publications

Integrated reporting and financial performance of South African listed banks

Integrated reporting and financial performance of South African listed banks

Measuring Efficiency and Effectiveness of Indonesian Regional Development Banks

Critical Assessment of Banking Institutions in South Africa

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