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Measuring Operational Efficiency of Foreign Branches of Bangladeshi Banks as Financial Intermediary

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  • Asmina Akter

Abstract

In this study an Output-oriented DEA (Data Envelopment Analysis) model is used to measure operational efficiency of foreign branches of Bangladeshi banks as financial intermediary organization for borrowing funds from savers and lending those funds to others for making profit. Among 58 Bangladeshi banks there are only three Bangladeshi banks which have in total seven foreign branches in different foreign locations. A branch of bank can’t be separated legally from its parent company and supervised by its home authorities as part of supervision of the banking group as a whole. By employing DEA model and using “Financial Intermediary Approach” this study found that as a financial intermediary organization between savers and borrowers these foreign branches of Bangladeshi banks are performing efficiently over the years. Among three banks Janata Bank Limited and AB Bank limited are performing most efficiently and Sonali Bank Limited is performing less efficiently relative to two other banks in operating their foreign branches as a financial intermediary organization for borrowing funds from savers and lending those funds to others for making profit.

Suggested Citation

  • Asmina Akter, 2021. "Measuring Operational Efficiency of Foreign Branches of Bangladeshi Banks as Financial Intermediary," International Journal of Business and Management, Canadian Center of Science and Education, vol. 15(2), pages 165-165, July.
    • Handle: RePEc:ibn:ijbmjn:v:15:y:2021:i:2:p:165
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    References listed on IDEAS

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    1. Md. Hashibul Hassan & Mahmudul Hassan, 2018. "Cost efficiency of banking sector of Bangladesh: evidence using the stochastic frontier analysis," Asian Journal of Empirical Research, Asian Economic and Social Society, vol. 8(6), pages 208-224, June.
    2. H. David Sherman & Joe Zhu, 2006. "Service Productivity Management," Springer Books, Springer, number 978-0-387-33231-4, March.
    3. Lin, Tzu-Yu & Chiu, Sheng-Hsiung, 2013. "Using independent component analysis and network DEA to improve bank performance evaluation," Economic Modelling, Elsevier, vol. 32(C), pages 608-616.
    4. Md Hashibul Hassan & Mahmudul Hassan, 2018. "Cost Efficiency of Banking Sector of Bangladesh: Evidence Using the Stochastic Frontier Analysis," Asian Journal of Empirical Research, Asian Economic and Social Society, vol. 8(6), pages 204-224.
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    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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