Evaluation of Bank Efficiency In Brazil a DEA Approach

Authors

  • Patricia Benites Cava Faculdade de Economia, Administração e Contabilidade de Ribeirão Preto (FEARP-USP)
  • Alexandre Pereira Salgado Junior Professor Associado do Departamento de Administração da Faculdade de Economia, Administração e Contabilidade de Ribeirão Preto da Universidade de São Paulo (FEARP-USP).
  • Adriel Martins de Freitas Branco Doutorando em Administração de Organizações pela Faculdade de Economia, Administração e Contabilidade de Ribeirão Preto (FEARP-USP)

Keywords:

Bank Efficiency. Banks. Brazilian Banks. Production Approach. DEA.

Abstract

Purpose: The research aims to evaluate the efficiency of banks that operated in the Brazilian market in 2013. To achieve this goal, efficient banks were identified according to the production approach. To detect and explain efficiency standards, additional analyses were carried out related to (1) capital origin, (2) size, (3) business segment and (4) risk rating.

Originality/Gap/Relevance/Implications: The Brazilian literature on bank efficiency features several studies linking the efficiency of banks to capital origin and size. However, the relationship between efficiency and business segment has been poorly explored and the relationship between efficiency and risk rating is scarce. In this sense, this research contributes to the literature by exploring the relationship between efficiency and business segment, as well as the relationship between efficiency and risk rating.

Key methodological aspects: The research uses a quantitative approach and employs the Data Envelopment Analysis (DEA) technique to calculate efficiency scores. The data were obtained from the Central Bank of Brazil (BACEN).

Summary of key results: Federal public banks and large banks are, on average, more efficient. Banks operating in foreign exchange and retail, as well as banks with high credit ratings, also achieved high levels of efficiency.

Key considerations/conclusions: Efficient banks proved to be more profitable, lent less money in proportion to their total assets, and received fewer complaints filed with the Central Bank of Brazil in 2013.

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Author Biographies

Patricia Benites Cava, Faculdade de Economia, Administração e Contabilidade de Ribeirão Preto (FEARP-USP)

Mestre em Engenharia de Produção pela Escola de Engenharia de São Carlos da Universidade de São Paulo(EESC-USP). Atualmente participa do GREFIC - Grupo de Estudos em Eficiência, pesquisando Análise Envoltória de Dados (DEA) aplicada a Bancos, na Faculdade de Economia, Administração e Contabilidade de Ribeirão Preto (FEARP-USP)

Alexandre Pereira Salgado Junior, Professor Associado do Departamento de Administração da Faculdade de Economia, Administração e Contabilidade de Ribeirão Preto da Universidade de São Paulo (FEARP-USP).

Livre-docente em Administração pela Universidade de São Paulo (FEARP-USP). Professor Associado do Departamento de Administração da Faculdade de Economia, Administração e Contabilidade de Ribeirão Preto da Universidade de São Paulo (FEARP-USP). Coordenador do GREFIC - Grupo de Estudos em Eficiência. Pesquisador em Análise Envoltória de Dados (DEA) aplicada à Gestão da Educação, Operadoras de Planos de Saúde, Bancos e ao Setor Energético.

Adriel Martins de Freitas Branco, Doutorando em Administração de Organizações pela Faculdade de Economia, Administração e Contabilidade de Ribeirão Preto (FEARP-USP)

Doutorando em Administração de Organizações pela Faculdade de Economia, Administração e Contabilidade de Ribeirão Preto (FEARP-USP). Aluno associado ao GREFIC - Grupo de Estudos em Eficiência, pesquisando Análise Envoltória de Dados (DEA) aplicada a Bancos. Atualmente é professor visitante nos Programas de Pós Graduação (MBAs) da FUNDACE, SENAC, Uniseb e INEPAD.

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Published

2016-09-15

Issue

Vol. 17 No. 4 (2016)

Section

Strategic Finances

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