An Empirical Study on Measuring Bank Branch Operating Efficiency

• Main Authors: Wu Bing-Song, 吳炳松
• Other Authors: Chen Cheng-Yuan
• Format: Others
• Language: zh-TW
• Published: 2001
• Online Access: http://ndltd.ncl.edu.tw/handle/95254783277560619320

碩士 === 國立高雄第一科技大學 === 財務管理系 === 89 === The government has continuously relieved the control of exchange rate and interest rate and kept ushering new financial merchandise. In 1991, a total of 16 new private banks were approved. This approval has made the local bank sector enter a state of perfect competition. Operating model of this sector has constructively changed. The hostile competition causes the profit slashed. Therefore, bank executives are searching for methods to appraise operating efficiency of their branches for the purpose of governing overall performance of a bank. This research selected 32 branches of a district bank and divided them into three groups according to the business capacity. The period for observation is from 1998 to 2000. The Data Envelopment Analysis was employed. Empirical findings are as follows: 1.The inefficiency of those branches derives from the inefficiency of scale. If the bank investigated intends to improve the efficiency of the whole bank, it needs to improve those ineffective branch’s scale efficiency. 2.The increasing of the operating efficiency results from effective and proprietary application of a branch’s resources by its management because of slim personnel as well as expense cut. 3.Using the loanable funds of other branches can improve the efficiency. However, the precondition is to control the quality of mortgage. 4.The branches that reach a certain scale of economy and have a good control of mortgage quality hold a better operating efficiency than those with relatively small scale. 5.Operating inefficiency is mostly due to the scale inefficiency. Therefore, the business capacity of a branch is significantly related with its operating efficiency. 6.A branch’s location affects its operating efficiency. The efficiency of branches in the city center is relatively higher than those in the outskirts.