Comparative efficiency analysis of Portuguese bank branches

Maria C.A. Silva Portela, Emmanuel Thanassoulis

Research output: Contribution to journalArticle

Abstract

The advent of Internet banking and phone banking is changing the role of bank branches from a predominantly transaction-based one to a sales-oriented role. This paper reports on an assessment of the branches of a Portuguese bank in terms of their performance in their new roles in three different areas: Their efficiency in fostering the use of new transaction channels, their efficiency in increasing sales and their customer base, and their efficiency in generating profits. Service quality is also a major issue in service organisations like bank branches, and therefore we analyse the way this dimension of performance has been accounted for in the literature and take it into account in our empirical application. We have used data envelopment analysis (DEA) for the different performance assessments, but we depart from traditional DEA models in some cases. Performance comparisons on each dimension allowed us to identify benchmark bank branches and also problematic bank branches. In addition, we found positive links between operational and profit efficiency and also between transactional and operational efficiency. Service quality is positively related with operational and profit efficiency. © 2006 Elsevier B.V. All rights reserved.

Original languageEnglish
Pages (from-to)1275-1288
Number of pages14
JournalEuropean Journal of Operational Research
Volume177
Issue number2
DOIs
Publication statusPublished - 1 Mar 2007

Fingerprint

efficiency analysis
bank
Branch
efficiency
Profit
Profitability
profit
Data envelopment analysis
Service Quality
Banking
Data Envelopment Analysis
banking
sales
Transactions
transaction
Sales
data analysis
performance comparison
Performance Assessment
performance assessment

Bibliographical note

NOTICE: this is the author’s version of a work that was accepted for publication in European Journal of Operational Research. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Portela, Maria C.A.S. and Thanassoulis, Emmanuel (2007). Comparative efficiency analysis of Portuguese bank branches. European Journal of Operational Research, 177 (2), pp. 1275-1288. DOI 10.1016/j.ejor.2006.01.007

Keywords

  • banking
  • efficiency
  • profitability
  • service quality

Cite this

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Comparative efficiency analysis of Portuguese bank branches. / Silva Portela, Maria C.A.; Thanassoulis, Emmanuel.

In: European Journal of Operational Research, Vol. 177, No. 2, 01.03.2007, p. 1275-1288.

Research output: Contribution to journalArticle

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