Open AccessThe relative efficiency of bank branches in lending and borrowing: An application of data envelopment analysis
Author(s) -
Gert van der Westhuizen
Publication year - 2014
Publication title -
suid-afrikaanse tydskrif vir ekonomiese en bestuurswetenskappe/south african journal of economic and management sciences
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.277
H-Index - 17
eISSN - 2222-3436
pISSN - 1015-8812
DOI - 10.4102/sajems.v8i3.1202
Subject(s) - data envelopment analysis , efficiency , balance sheet , asset (computer security) , liability , business , cost efficiency , off balance sheet , economics , financial system , finance , monetary economics , statistics , mathematics , computer science , computer security , estimator , operating system
The relative efficiency of fifty-two branches of a small South African bank was estimated using Data Envelopment Analysis (DEA). A factor responsible for the difference in efficiency between branches might be the difference in managing the asset (loans) and the liability (deposit) side of the balance sheet. For this reason, the relative efficiency of the lending and borrowing activities was also estimated and compared to the relative efficiency of the combined (lending and borrowing) activities.In the case of the efficiency estimates for loans and deposits, the indications are that the branches were more efficient in managing the liability side (deposits) than in managing the asset side (loans). This means that purchased funds were not utilised efficiently