Estimation of the efficiency of Tunisian bank branches using a stochastic frontier approach

Aissia, Dorsaf Ben; Ellouz, Molka

doi:10.1007/s43546-021-00133-x

Cited by 2 publications

(3 citation statements)

References 37 publications

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“…Banks can improve efficiency in their operations by reducing operating expenses, developing branches' technical capabilities and increasing recovery rates (Islam et al, 2017). The early researches on bank efficiency focused mostly on European countries, the United States and Japan (Aissia and Ellouz, 2021). The non-parametric method (DEA) and the parametric approach (Stochastic Frontier Analysis [SFA]) were used in the existing literature to measure bank efficiency.…”

Section: Literature Review 21 Theoretical Backgroundmentioning

confidence: 99%

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Benchmarking the banking sector of Bangladesh: a comprehensive analysis of performance and efficiency

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Hossain

Khan

et al. 2022

AJEB

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PurposeThe economic development of Bangladesh is heavily reliant on the banking industry, yet it faces numerous hurdles, including liquidity issues, capital shortages, non-performing loans, inefficiencies and so on. Therefore, this study investigated the performance and efficiency of scheduled banks (state-owned, private commercial, foreign commercial and specialized banks) operating in Bangladesh.Design/methodology/approachThe research was conducted using secondary data from annual reports of banks. The CAMELS rating system and Data Envelopment Analysis (DEA) methods were employed to measure the performance and efficiency of banks, respectively.FindingsIn the overall bank rankings, results revealed that foreign commercial Standard Chartered Bank and state-owned Sonali Bank Limited came in first and last position, respectively. Among the four categories of banks, foreign commercial banks were the best performer, while state-owned banks were the worst. Only two banks, i.e. Citibank NA and HSBC Bank, were scale efficient while the remaining banks were inefficient. In terms of performance and efficiency, state-owned and specialized banks were deemed wanting.Practical implicationsThis study proposes recommendations to the policymakers that could lead to more effective tactics for improving the banking industry's performance and efficiency.Originality/valueAs far as the authors are concerned, this study presents empirical evidence on the performance and efficiency of different types of banks and explores comparisons among them, which has never been done to this extent in the country before.

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Section: Literature Review 21 Theoretical Backgroundmentioning

confidence: 99%

“…, 2017). The early researches on bank efficiency focused mostly on European countries, the United States and Japan (Aissia and Ellouz, 2021). The non-parametric method (DEA) and the parametric approach (Stochastic Frontier Analysis [SFA]) were used in the existing literature to measure bank efficiency.…”

Section: Literature Reviewmentioning

confidence: 99%

Benchmarking the banking sector of Bangladesh: a comprehensive analysis of performance and efficiency

Yesmine

Hossain

Khan

et al. 2022

AJEB

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“…Their results indicate that the performance is higher for the banks with joint-equity holdings than the state-owned banks. Aissia and Ellouz ( 2021 ) also used SFA to estimate the efficiency of 94 branches of a Tunisian public bank for the period from 2007 to 2019 and found that efficiency levels among branches are rather similar. The annual TFP growth was 4.4% over the period 1993–2002.…”

Section: Studies On Bank Performancementioning

confidence: 99%

Productivity analysis of Sri Lankan cooperative banks: input distance function approach

Arandara

Takahashi

2022

Asia-Pac J Reg Sci

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This study examined how Sri Lankan cooperative banks performed in changing markets and environmental conditions, including the COVID-19 pandemic. We analyzed quarterly financial data for 103 cooperative rural banks (CRBs) between 2016 and 2020 to estimate technical efficiency and total factor productivity (TFP) using the input distance function with multiple outputs. The technical efficiency (TE) of CRBs declined from 99 to 85% over the period and differences in TE between banks increased substantially. TFP decreased substantially, by 38%, so for further analysis, TFP change was separated into a three component-scale change, technical change, and technical efficiency change. According to TFP decomposition, the dominant factor contributing to this decline was the scale change. The loan relief program enacted during the COVID-19 crisis, as well as increased competition in the market, may have reduced the size of operations, thus possibly contributing to this decline. The second component, technical change was overall positive, but minute likely due to the reluctance of cooperative banks’ to adopt new technologies. The third component technical efficiency change was negative throughout the period, likely due to increased operating expenses and non-performing loans. These findings suggest the need for a more market-sensitive government intervention, adaptation of modern technology, and comprehensive human resource development to enhance the performance of CRB operations.

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Estimation of the efficiency of Tunisian bank branches using a stochastic frontier approach

Cited by 2 publications

References 37 publications

Benchmarking the banking sector of Bangladesh: a comprehensive analysis of performance and efficiency

Benchmarking the banking sector of Bangladesh: a comprehensive analysis of performance and efficiency

Productivity analysis of Sri Lankan cooperative banks: input distance function approach

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