scholarly journals The Nexus of Efficiency and Profitability: A Case Study of Private Commercial Banks of Pakistan

2019 ◽  
Vol IV (IV) ◽  
pp. 434-450
Author(s):  
Farhat Ullah Khan ◽  
Aman Ullah Khan ◽  
Siraj -Ud- Din
Keyword(s):  
Technical Efficiency ◽  
Commercial Banks ◽  
Role Model ◽  
Business Strategies ◽  
Data Envelopment ◽  
Ratio Analysis ◽  
Return On Assets ◽  
Parametric Data ◽  
The Relationship

The study aimed at exploring the relationship between efficiency and profitability of private commercial banks operating in Pakistan. The efficiency represented by technical efficiency has been assessed by non-parametric data envelopment analysis approach while profitability indicated by return on assets has been computed through conventional ratio analysis for period 2009 to 2013. The analysis revealed that technical efficiency declined during the study period and remained at 89%. HMB was identified as the top-performing bank in technical efficiency while MCB remained highly profitable. Banks were then grouped based on TE and ROA. MBL, UBL, DIB, SCB, BAH, HBL and HMB observed as top-performing banks based on TE and ROA. These banks are considered a role model for other inefficient and less profitable banks. Whereas, other banks were grouped as weak, based on below-average ROA and TE scores. These banks can adopt distinct product mix or business strategies to become profitable in future.

scholarly journals Examining Banks Profitability and Banks Efficiency of Islamic Commercial Banks in Indonesia

2017 ◽  
Author(s):  
chandra setiawan ◽  
Onie Insany Kodratillah
Keyword(s):  
Technical Efficiency ◽  
Commercial Banks ◽  
Least Square ◽  
Data Envelopment ◽  
Return On Assets ◽  
Published Report ◽  
Net Profit ◽  
Report Data ◽  
Using Data ◽  
The Relationship

This research investigates: first, the Return on Assets (ROA) determinants of Islamic commercial banks in Indonesia period of 2012Q1 – 2016Q2 using panel least square by adopting Fixed Effect Method (FEM); second, measuring the technical efficiency level using Data Envelopment Analysis (DEA) approach; third, the relationship between technical efficiency and Return on Assets (ROA) using simple regression. This research uses time series and quarterly published report data from Central Bank (Bank Indonesia). The results as follows: Size (log total assets), Operational Efficiency Ratio (OER), Net Profit Margin ratio (NPM), Financing to Deposit Ratio (FDR), and BI rate have partially and simultaneously significant effect toward Return on Assets (ROA). The average technical efficiency of Islamic commercial banks is 0.919 or 91.9%. This finding indicates that Bank Negara Indonesia Syariah (BNIS) in the research period as the most technical efficiency. It shows that in overall Islamic commercial banks is still inefficient in managing their performance. The finding reveals there is no significant relationship between Technical Efficiency and Return on Asset.

The relationship between supervision quality, CEO’s ability and authority with firm performance

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mahdi Salehi ◽  
Ameneh Bazrafshan ◽  
Mahdieh Hosseinkamal
Keyword(s):  
Data Envelopment Analysis ◽  
Firm Performance ◽  
Design Methodology ◽  
Business Strategies ◽  
Data Envelopment ◽  
Improve Performance ◽  
Return On Assets ◽  
Content Type ◽  
Listed Firms ◽  
The Relationship

Purpose This paper aims to investigate the relationship between a CEO's ability and authority with firm performance. The authors used a sample of 127 Iranian listed firms for over seven years, from 2011 to 2017. Design/methodology/approach The authors used data envelopment analysis (DEA) to evaluate managers' abilities, and the authors used business strategies to gauge authorities. Also, the methods of Fama–French and Herfindal–Hirschman were used for 889 firm-year observations. Findings The results show that managers' ability based on return on assets can affect firm performance, and skilled managers can improve performance. Originality/value In Iran, managers' abilities and other variables can impact it has been studied. Still, no study has been conducted on managers' strength and their level of authority with the presence of supervision on them.

scholarly journals Impact of an input-output specification on efficiency scores in data envelopment analysis: a banking case study

2020 ◽  
Author(s):  
Martin Boďa ◽  
Zuzana Piklová
Keyword(s):  
Technical Efficiency ◽  
Commercial Banks ◽  
Initial Step ◽  
Efficiency Measurement ◽  
Data Envelopment ◽  
Efficiency Measure ◽  
Input Output ◽  
Measures Of Association ◽  
Regression Framework

The paper stresses the importance of making an appropriate specification of inputs and outputs in technical efficiency measurement and provides empirical evidence that this initial step of an efficiency measurement project should not be underestimated. Oriented on a case study of Slovak commercial banks for the period from 2005 to 2016, the paper explores to which extent different input-output specifications affect the comparability or congruence of technical efficiency scores produced by six different data envelopment models differing in the efficiency measure and orientation. Building on the long-standing controversy in the banking literature about the most appropriate description of banking production, the paper compares technical efficiency scores for 9 input-output specifications of the intermediation approach, 9 specifications of the production-like approaches and 3 network integrated specifications. All these specifications were empirically applied earlier in the literature. The efficiency scores produced by different input-output specifications and models are confronted by six measures of association or dependence, and their levels are explained in a regression framework. The results suggest that the choice of the input-output set is a critical judgemental input to efficiency measurement since there is vast diversity in efficiency scores of input-output sets coming from different approaches but also for input-output sets associated with the same approach. In addition, intermediation input-output specifications tend to produce higher efficiency scores than production-like specifications.

scholarly journals Bad Debt and Cost Efficiency in Vietnamese Commercial Banks

2015 ◽  
Vol 22 (1) ◽  
pp. 125-140
Author(s):  
Vinh Nguyen Thi Hong
Keyword(s):  
Data Envelopment Analysis ◽  
Cost Efficiency ◽  
Commercial Banks ◽  
Direct Relationship ◽  
Data Envelopment ◽  
Dea Method ◽  
Two Stages ◽  
The Cost ◽  
The Relationship ◽  
Bad Debt

The paper aims at exploring the relationship between bad debt and cost efficiency in Vietnamese commercial banks in the years 2007 – 2013. The research includes two stages: (i) Measuring the cost efficiency of banks by non-parameter Data Envelopment Analysis (DEA) method suggested by Coelli (2005); and (ii) Applying the Tobit model to identify two-way effects of bad debt and bank cost efficiency. The results show that the cost efficiency in Vietnamese commercial banks is 52.6% and there exists a direct relationship between bad debt and cost efficiency.

scholarly journals BANKING SECTOR EFFICIENCY: A DEA AND TIME SERIES APPROACH

Ekonomika ◽  
2010 ◽  
Vol 89 (2) ◽  
pp. 111-119 ◽  
Author(s):  
Fadzlan Suflan
Keyword(s):  
Technical Efficiency ◽  
Banking Sector ◽  
Scale Efficiency ◽  
Data Envelopment ◽  
Bank Efficiency ◽  
New Approach ◽  
Time Series Approach ◽  
The Mean ◽  
Dea Method

The paper provides a new approach to modeling bank efficiency. Unlike previous bank efficiency studies, the present paper employs the data envelopment analysis (DEA) method on quarterly data to construct the efficiency frontiers. The Malaysian banking sector is used for a case study. The results show that the Malaysian banking sector has exhibited the mean technical efficiency of 97.3%, suggesting the minimal input waste of 2.7%. The empirical findings suggest that the pure technical efficiency outweighs the scale efficiency in determining the Malaysian banking sector’s technical efficiency. The results imply that, although the Malaysian banking sector has been efficient in managerial terms, it has been operating at a non-optimal scale of operations.p>

scholarly journals Bank risk profile and horizons in financing investment projects: a case study of selected banks in Uzbekistan

2021 ◽  
Vol 7 (5) ◽  
pp. 38-42
Author(s):  
Rustam Sultanov ◽  
Umidjon Duskobilov
Keyword(s):  
Method Of Moments ◽  
Commercial Banks ◽  
Positive Impact ◽  
Risk Profile ◽  
Bank Risk ◽  
Investment Activity ◽  
Investment Projects ◽  
Generalised Method Of Moments ◽  
The Relationship

The article presents the results of risk analysis in financing investment projects. In the example of three commercial banks, the relationship between the factors causing risks and the dynamics of the volume of financing of investment projects was modelled using the two-step generalised method of moments - 2SGMM. According to the results of econometric analysis, among the factors, risk assets, risk profile, interest income and investment activity of banks have a significant positive impact on the dynamics of investment loans.

scholarly journals Farm Structure And Efficiency In The Hungarian Agriculture

2015 ◽  
Vol 4 (2) ◽  
pp. 51-56
Author(s):  
Orsolya Tóth ◽  
István Takács
Keyword(s):  
Technical Efficiency ◽  
Stochastic Frontier Analysis ◽  
Stochastic Frontier ◽  
Farm Size ◽  
Empirical Literature ◽  
Data Envelopment ◽  
Frontier Analysis ◽  
Parametric Data ◽  
Legal Forms ◽  
On Farm

Abstract It has long been the subject of empirical researches to examine the technical efficiency on farm (micro) level. Two main methods are most often used in the empirical literature: the non-parametric Data Envelopment Analysis (DEA) based on linear programming, and the Stochastic Frontier Analysis (SFA) introduced by Aigner, Lovell and Schmidt (1977). The present study aimed to investigate the technical efficiency of farms involved in agricultural activities in Hungary using the DEA-method and the data from the Hungarian FADN database. The technical efficiency was examined based on legal forms, farm size categories and the type of farming between 2001 and 2013.

Sign in / Sign up

Export Citation Format

Share Document