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Benchmarks of the Efficiency of Bank Branches

Author

Listed:
  • Christiana V. Zenios

    (Treasury Department, Bank of Cyprus, PO Box 1472 Nicosia, Cyprus)

  • Stavros A. Zenios

    (Department of Public and Business Administration, University of Cyprus, PO Box 20537, CY 1678, Nicosia Cyprus)

  • Kostas Agathocleous

    (Organization and Methods Division, Bank of Cyprus)

  • Andreas C. Soteriou

    (Department of Public and Business Administration, University of Cyprus, PO Box 20537, CY 1678, Nicosia Cyprus)

Abstract

The Bank of Cyprus commissioned a study of the efficiency penalties paid by its branches operating in different environments. Bank staff and faculty members of the University of Cyprus jointly developed a data envelopment analysis (DEA) model that was used (1) to provide benchmarks on the relative efficiency of the bank's branches, (2) to provide guidelines for improvement to management, and (3) to isolate the effects of the environment on branch efficiency. The analysis showed that tourist branches were on average more efficient than urban branches during the peak tourist season. The DEA model was also used to benchmark seasonality effects. The analysis revealed branch resource underutilization, which depends on the season. The bank uses the DEA model developed to establish policy guidelines and to provide support for operational decisions toward performance improvement.

Suggested Citation

  • Christiana V. Zenios & Stavros A. Zenios & Kostas Agathocleous & Andreas C. Soteriou, 1999. "Benchmarks of the Efficiency of Bank Branches," Interfaces, INFORMS, vol. 29(3), pages 37-51, June.
  • Handle: RePEc:inm:orinte:v:29:y:1999:i:3:p:37-51
    DOI: 10.1287/inte.29.3.37
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    File URL: http://dx.doi.org/10.1287/inte.29.3.37
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    Citations

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    Cited by:

    1. E. Grigoroudis & E. Tsitsiridi & C. Zopounidis, 2013. "Linking customer satisfaction, employee appraisal, and business performance: an evaluation methodology in the banking sector," Annals of Operations Research, Springer, vol. 205(1), pages 5-27, May.
    2. Jie Wu & Zhixiang Zhou, 2015. "A mixed-objective integer DEA model," Annals of Operations Research, Springer, vol. 228(1), pages 81-95, May.
    3. Aggelopoulos, Eleftherios & Georgopoulos, Antonios, 2017. "Bank branch efficiency under environmental change: A bootstrap DEA on monthly profit and loss accounting statements of Greek retail branches," European Journal of Operational Research, Elsevier, vol. 261(3), pages 1170-1188.

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