A network SBM model for evaluating bank branch performance with consideration of undesirable output

Complexity nature of bank branch evaluation needs comprehensive approach. Dealing with such circumstance, we apply a two-stage slacks-based measure approach in DEA for evaluating the efficiency of an Iranian bank in an aggregative point of view; consist of marketability and profitability stages. In this paper we employ branch space, physical capital and personnel score as inputs for producing total deposits and total loans in the first stage as intermediate measures and in the second stage total loans and deposits used to produce net profit. In order to have more conformances to the reality, loan losses as an undesirable output entered into the model in the second stage.

A network SBM model for evaluating bank branch performance with consideration of undesirable output Keywords:

Efficiency , DEA , Slacks-based measure , Network DEA , Network SBM , Divisional efficiency , Overall efficiency